China Restricts iPhone Assembler Foxconn Amid New COVID-19 Outbreaks

Apple’s biggest iPhone assembler Foxconn has been forced to operate within a “closed loop” restricted system for seven days amid new Covid-19 outbreaks in Shenzhen, Bloomberg is reporting.

Foxconn

The local government has asked its 100 biggest companies, including Huawei Technologies Co. and ZTE Corp., to restrict operations only to employees living within a closed loop.

The authorities have also instructed the companies to reduce unnecessary interaction between non-manufacturing staff and factory floors to reduce infection spread.

A Foxconn spokesperson said operations at its Shenzhen sites “remained normal.” Its plant in the central Chinese city of Zhengzhou is a far bigger iPhone-making hub.

The measure in Shenzhen rekindles the possibility of Shanghai-style lockdowns that forced tens of thousands of workers into isolation. Apple supplier Quanta Computer Inc., chipmaker Semiconductor Manufacturing International Corp. and Tesla Inc. were among the companies that ran their Shanghai plants in closed loops for weeks or months.

Shenzhen reported 21 cases for Saturday, up from 19 a day ago, according to health authorities.

The latest restrictions come just months before Foxconn is due to deliver the next generation of Apple’s iPhone lineup.

Earlier this year, Apple predicted that supply constraints are expected to cost $4 billion to $8 billion in revenue.