Apple Supplier Foxconn Lifts Lockdown at World’s Largest iPhone Factory
Foxconn, Apple’s biggest supplier, has relaxed most COVID-19 prevention restrictions at the world’s largest iPhone factory, operated by the Taiwanese company in Zhengzhou, China — reports Bloomberg.
The Apple supplier said in a Wednesday statement on its official WeChat account that it will no longer employ a “point-to-point” system, which restricted employees’ daily movements to between their dormitories and the factory campus. This effectively marks the end of Foxconn’s “closed-loop” production system.
Foxconn added that it has reopened on-site cafetarias in what’s known as “iPhone City” and will no longer provide three free meals per day to workers. Workers will have meal expenses deducated from their wages, the company said, noting that those who work regularly will receive 15 yuan ($2.15 USD) of subsidies per day from December 16 to 31.
Foxconn said it will continue to provide free meals to COVID-19 patients who choose to stay at company-appointed accommodations. The company first closed cafetarias back in October, restricting workers’ movements at the same time to limit the spread of COVID-19.
Foxconn’s Zhengzhou plant is responsible for producing most of Apple’s highest-end iPhones, the iPhone 14 Pro series. Production disruptions at the plant will shortchange Apple by six million units of its flagship phones in the holiday quarter, according to a previous Bloomberg report.
However, TF International Securities analyst Ming-Chi Kuo has speculated that Apple could see a production deficit of 15-20 million iPhone 14 Pro units in its biggest quarter of the year. The Zhengshou plant isn’t expected to ramp back up to full production capacity until late December or early January.
“Foxconn will now need to address the potential increase in sickened staff and a possible shortage of workers,” said Will Wong, senior research manager at IDC. He added that many workers might not want to leave their homes ahead of family gatherings during Chinese New Year next month, he said. “More initiatives will need to be taken to appease staff, other than financial compensation.”
Foxconn initially offered disgruntled workers 10,000 yuan ($1,400 USD) last month, but that didn’t prevent worker unrest from turning into full-blown, violent protests. The Apple supplier was instrumental in convincing China to ease its zero-COVID policy, which was straining economic activity in the country.
As a result of its recent supply chain woes in China, Apple is reportedly accelerating plans to move more of its production to other Asian countries.