Lockdown at Foxconn’s Zhengzhou Plant Has Ended, With Estimated Disruption Costs of $1b/Week for Apple

Following an extensive ordeal, the lockdown at Foxconn’s ‘iPhone City’ Zhengzhou plant has now ended. Though, it’s being reported that the disruptions in production are costing Apple an estimated $1 billion USD per week.

Foxconn’s Zhengzhou plant is Apple’s largest iPhone manufacturing facility. In charge of producing the iPhone 14 Pro and iPhone 14 Pro Max, the Zhengzhou facility has roughly 200,000 workers on campus. This past week, frustrations due to COVID-19 lockdowns and restrictions reached a boiling point. With workers receiving notice that their bonus pay was being delayed, the lockdown turned violent as workers began attacking officials. However, following a five-day stint, CNN now reports that the lockdown in Zhengzhou has ended.

The situation first began in October when rising COVID-19 cases at the plant were being reported. Due to China’s no-tolerance policy, Foxconn’s plant went on lockdown with workers staying on campus to work, eat, and sleep. However, due to a reported lack of supplies, medicine, and food, workers began walking out en masse. In order to hopefully quell the situation, Foxconn offered bonus pay to those who remained on their shifts. However, earlier this month, workers were told their pay would be delayed. The lockdown escalated and turned violent.

The result of this ordeal is said to impact Apple quite significantly. Previously, it was reported the lockdown and subsequent protests would see Apple falling short of nearly six million iPhone 14 Pro units. Now,  managing director of equity research at Wedbush Securities, Daniel Ives, estimates that supply hurdles would cost Apple upwards of $1b USD each week. “There is a lot of heavy lifting ahead for Apple to ramp back up the factories,” Ives states.

With workers now able to exit from its closed-loop production, tension should be slowly eased. However, the scaling up of production ahead of the holidays may not be as straightforward. It’s reported that nearly 20,000 workers took Foxconn’s exit payment for new hires. This could mean that shortages of iPhone 14 Pro and iPhone 14 Pro Max would remain throughout the holiday period.

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