Sunday, February 25, 2024

Apple supplier, Foxconn, says it has resumed some production in Shenzhen after Covid outbreak

Uba Group

Foxconn, a major assembler of Apple’s iPhones, has announced that it has partially resumed production in Shenzhen, a Chinese manufacturing hub.

The company said earlier last week that it had paused operations in Shenzhen after an uptick in Covid-19 cases led the city to shut down.

Foxconn said it is only able to resume production on campuses that include both employee housing and production facilities.
The Taiwanese firm added that a “closed loop” process has been implemented on these campuses that adhere to policies issued by the Shenzhen Government.

“In applying this closed-loop management process within the Shenzhen campus and in implementing the required health measures for the employees who live on campus, some operations have been able to restart and some production is being carried out at those campuses,” a Foxconn spokesperson told CNBC.

They added, “The Company will continue to work closely with the relevant authorities in monitoring these operations very closely.”

Foxconn’s main facilities in Shenzhen are in Longhua Town and Guanlan but the company did not specify exactly where production will resume or on what kind of products.

The shutdown earlier last week came just days after Apple announced its latest slate of new products, including a budget iPhone that’s expected to outperform in Asia.

Foxconn produces some iPhones, iPads and Macs in Shenzhen. However, almost 50% of iPhones are produced at a factory in Henan province, according to a Bank of America research note. Apple can start to ramp up production in Henan province to recoup some of those losses.

“Apple/Foxconn has the ability to relocate production to other areas in the short term provided that there is not a significantly higher duration of lockdown.

“An increased period of shutdowns can cause ripple effects at other components that can create a shortfall in production,” the firm’s analysts wrote.

Apple did not immediately respond to a CNBC request for comment.


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