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Covid-19 Threatens Over 10% of Global iPhone Output at No. 1 Plant, Analyst Says

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(Yicai Global) Oct. 31 — The current Covid-19 outbreak in Apple’s largest international manufacturing base overshadows greater than 10 p.c of the worldwide iPhone manufacturing capability, based on an analyst.

Hon Hai Precision Trade, the guardian firm of Foxconn, has entered a “closed-loop” administration system at the plant in central China’s Zhengzhou, which may have an effect on the Apple contract producer’s output, Kuo Ming-chi, analyst at Tianfeng Worldwide Securities, stated yesterday. The Covid-era system signifies that workers solely work together with co-workers, sleeping within the manufacturing unit.

The Zhengzhou industrial park is cooperating with the native authorities in Henan province to manage the pandemic state of affairs whereas Foxconn will coordinate with different crops to help the manufacturing to cut back the doable affect, the New Taipei-based agency stated in its newest assertion.

Foxconn associates’ shares dropped after the announcement. FIH Cellular [HK: 2038] closed 4.9 p.c decrease at HKD0.64 (US 8 cents). Foxconn Industrial Web’s inventory worth [SHA: 601138] slipped 1 p.c to CNY8.20 (USD1.10).

Foxconn’s capability is anticipated to enhance step by step within the coming weeks, so the pandemic management measures are predicted to have a restricted affect on output within the fourth quarter, Guo stated, including that Apple has not modified its whole iPhone output estimate.

The American agency is checking its choices as it’s discussing with Taipei-based Pegatron and Shenzhen’s Luxshare Precision Trade to improve some manufacturing strains for iPhone 14 and iPhone 14 Plus to make iPhone 14 Professional and iPhone 14 Professional Max, Guo stated. However Luxshare, a connector cable maker that reported decrease 2021 income than Foxconn did monthly, may churn out its first iPhone 14 Professional within the first quarter of 2023 at the earliest.

China has the largest international share of Apple suppliers. The California-headquartered expertise big had 190 suppliers final 12 months, and greater than 50 of them had been primarily based in China’s mainland, based on Apple’s report launched this month. In the meantime, Foxconn’s plant in Zhengzhou is Apple’s largest manufacturing base on this planet with greater than 90 manufacturing strains and about 300,000 staff.

Foxconn is essential for the province because the producer’s overseas commerce made up as a lot as 67.5 p.c of Henan’s imports and exports in 2015, rising from practically 29 p.c in 2011. The clustering impact is obvious as a number of smartphone manufacturers have entered the Zhengzhou Airport Financial system Zone, following the foremost producer.

The worth of China’s smartphone exports accounted for 27 p.c of international smartphone gross sales in 2019, with 1 / 4 of that coming from Henan, based on IDC information.

Editors: Shi Yi, Emmi Laine, Xiao Yi

 

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