China’s Zhengzhou, home to the world’s largest iPhone factory, ends Covid lockdown




Hongkong
CNN

Major Chinese cities, including financial center Shanghai and Zhengzhou – home to the world’s largest iPhone factory – said on Wednesday that they Lifting the Covid lockdown.

Zhengzhou is home to “iPhone City,” a sprawling campus owned by Taiwanese contract manufacturer Foxconn that typically houses some 200,000 workers who make products for Apple

(apple)
, including the iPhone 14 Pro and 14 Pro Max.City locking Its urban area last Friday or five days as Covid-19 cases surged.

In Shanghai, China’s largest and wealthiest city, health authorities announced that a lockdown imposed on 24 high-risk areas in 11 districts would be lifted starting Thursday.

Local authorities have also lifted the lockdown on four districts in the city, Zhang Yi, spokesman for the Guangzhou Municipal Health Commission, told a news conference.relax restrictions Implemented earlier this month The manufacturing and transport hub clashed after residents clashed with police on Tuesday.

Foxconn’s sprawling factory does not belong to Zhengzhou City. Analysts, however, said the lockdown would be detrimental to efforts to recover lost production at the park. violent workers uprising last week.

“This is some good news in a dark storm for Cupertino,” Daniel Ives, managing director of equity research at Wedbush Securities, told CNN Business, referring to the California city where Apple is based. “Apple has a lot of heavy lifting to do to restart its factories.”

Ives estimates that Apple is losing about $1 billion in lost iPhone sales per week due to ongoing supply disruptions at Foxconn’s Zhengzhou campus. The troubles began in October, when workers left the campus in Zhengzhou, the capital of central Henan province, out of Covid-related fears. Staff shortages, bonuses offered to workers to return.

But protests erupted last week when new hires said management had reneged on their promises. Workers who clashed with security guards were eventually given cash to resign and leave.

Analysts say Foxconn’s production woes will accelerate efforts to diversify its supply chain away from China to countries such as India.

Tianfeng International Securities analyst Ming-Chi Kuo, write on social media He estimated iPhone shipments could be 20% below expectations for the current October-December quarter. He said that the average capacity utilization rate of the Zhengzhou factory in November was only about 20%, and it is expected to increase to 30% to 40% in December.

Kuo said combined iPhone 14 Pro and 14 Pro Max shipments for the quarter will be 15 million to 20 million fewer than previously expected. He added that Apple’s overall iPhone revenue for the current holiday quarter could be 20% to 30% lower than investor expectations due to the higher prices of the iPhone 14 Pro series.

— Laura He and Wayne Chang in Hong Kong and Xiaofei Xu in Paris contributed to this article.



Source link

Leave a Comment