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Foxconn to start making iPhones again at the biggest factory in the world

Foxconn to start making iPhones again at the biggest factory in the world

Foxconn to start making iPhones again at the biggest factory in the world

Foxconn to start making iPhones again at the biggest factory in the world

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  • Ongoing supply problems at Foxconn’s campus in the city of Zhengzhou were costing Apple about $1 billion a week in lost iPhone sales.
  • The problems started in October, when workers left the campus because they were worried about their jobs and there wasn’t enough food.
  • Apple (AAPL) has moved up plans to move some of its production out of China in the past few weeks.
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Foxconn, an Apple supplier, says it is “gradually” getting back to full production at its huge campus in central China. Since October, Covid-19 restrictions and worker protests have hurt production there.

The Taiwanese contract manufacturer said in a statement on Monday that the “epidemic situation” at the facility, which is called “iPhone City” and is usually home to hundreds of thousands of workers, has been brought under control.

“We’ve also started hiring new people and are making slow progress toward getting production back to normal,” the report said, adding that the outlook for the fourth quarter was expected to be in line with what the market thought.

Foxconn did not provide further details. Its executives told Reuters that full production would start up again between the end of December and the beginning of January.

An analyst at Wedbush Securities named Daniel Ives told that the ongoing supply problems at Foxconn’s campus in the city of Zhengzhou were costing Apple about $1 billion a week in lost iPhone sales. He thinks that Apple doesn’t have enough iPhones to meet demand during the important holiday shopping season.

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The problems started in October, when workers left the campus because they were worried about their jobs and there wasn’t enough food. Because they were short on workers, bonuses were given to those who came back.

But there were protests last month when people who had just been hired said that management had broken their promises. Workers and security officers got into fights, and then the company gave them money to quit and leave.

Analysts said that the problems with making iPhones at iPhone City would speed up Apple’s move away from China as a source of parts.

The Wall Street Journal says that Apple (AAPL) has moved up plans to move some of its production out of China in the past few weeks. It was reportedly telling suppliers to make more plans for putting together Apple (AAPL) products in India and Vietnam and other places in Asia.

Apple didn’t answer right away when asked for a comment.

“The shift out of China won’t be easy, and there will be clear logistical, engineering, and infrastructure hurdles,” Ives wrote in a research report on Sunday. “The aggressive move to India and Vietnam now begins, and the Apple ecosystem has been warned.”

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He also said that if Apple moves quickly, more than half of iPhones could be made in India and Vietnam by the 2025/2026 fiscal year, up from a single-digit percentage now.

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