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Apple says iPhone production hit by China Covid lockdown
by AFP Staff Writers
Beijing (AFP) Nov 7, 2022

China virus cases at six-month high despite grinding lockdowns
Beijing (AFP) Nov 7, 2022 - China reported its highest daily Covid caseload in six months Monday, despite grinding lockdowns that have heavily disrupted manufacturing, education and day-to-day life.

Beijing over the weekend quashed hopes that its strict zero-Covid policy -- in which spot lockdowns, quarantines and mass testing are employed to quash outbreaks -- might be relaxed anytime soon.

But a torrent of lockdown-related scandals where residents have complained of inadequate conditions, food shortages and delayed emergency medical care have chipped away at public confidence.

The country logged over 5,600 new Covid cases Monday -- almost half in Guangdong province, a manufacturing hub in the country's south home to major ports.

And in central China, a grueling lockdown at the world's biggest iPhone factory in Zhengzhou led Apple Sunday to warn that production had been "temporarily impacted" and that customers would experience delays in receiving their orders.

"The facility is currently operating at significantly reduced capacity," the California-based tech giant said in a statement late Sunday.

Taiwanese tech giant Foxconn -- Apple's principal subcontractor which runs the plant -- revised down its quarterly earnings forecast Monday due to the lockdown.

China's National Health Commission vowed Saturday to "unswervingly" stick to zero-Covid, dashing a major stock market rally last week on the back of unsubstantiated rumours that Beijing would imminently loosen its strict virus policy.

But a number of high-profile incidents have chipped away at the Chinese public's support for the approach.

The death by suicide of a 55-year-old woman in the locked-down city of Hohhot, Inner Mongolia sparked widespread outcry over the weekend after authorities admitted that lockdown protocols delayed their emergency response.

The region has been in the grip of a major outbreak since late September, when a new Omicron variant was first detected.

Shortly before the woman jumped from a window, relatives had reported to community workers that she suffered from an anxiety disorder and had shown suicidal intent.

Audio of the woman's daughter begging community workers to unseal her door that had been welded shut went viral on Chinese social media, drawing attention to mental health crises exacerbated by weeks-long lockdowns.

"Who has the right to weld building gates shut? Who has the right to restrict others' freedom to live? What if there is an earthquake or fire, who is responsible afterwards?" read one comment on the Twitter-like Weibo platform.

Local officials have vowed to punish community workers who forcibly seal household doors and building gates with locks, despite it being widespread practice in locked-down areas.

The incident came days after a toddler in the locked-down city of Lanzhou, northwest China's Gansu province, died of carbon monoxide poisoning after the slow response of emergency medical services delayed hospital treatment.

In a viral social media post that was later deleted, the boy's father blamed lockdown controls and community workers for obstructing their access to hospital, while district authorities later apologised for the incident.

Apple warned customers would face longer wait times for iPhones with the holiday season approaching, after Covid restrictions in central China "temporarily impacted" production at the world's largest factory producing the smartphone.

Foxconn, Apple's principal subcontractor, locked down its massive factory in Zhengzhou last month after a spike in infections -- in line with China's zero-Covid policy.

In a separate statement Monday, the Taiwanese firm said its fourth quarter earnings this year would take a hit from the coronavirus lockdowns.

Panicking workers last week had fled the site on foot in the wake of allegations of poor conditions at the facility, which employs hundreds of thousands of workers.

"Covid-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China," California-based Apple said in a statement late Sunday.

"The facility is currently operating at significantly reduced capacity."

Despite strong demand for Apple's products ahead of the holiday season, "we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated", it said.

"Customers will experience longer wait times to receive their new products."

Foxconn is China's biggest private sector employer, with more than a million people working across the country in about 30 factories and research institutes.

But Zhengzhou is the Taiwanese company's crown jewel, churning out iPhones in quantities not seen anywhere else.

"In a normal situation, almost all the iPhone production is happening in Zhengzhou," Ivan Lam, an analyst with specialist firm Counterpoint, told AFP.

The company was initially "cautiously optimistic" about its fourth quarter earnings, it said.

"But due to the pandemic affecting some of our operations in Zhengzhou, the company will 'revise down' the outlook for the fourth quarter," Foxconn said in a statement.

"Foxconn is now working with the government in (a) concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible," the company said.

It did not give any statistical projection for how badly it expected earnings to be hit.

"This is a dark sign of the zero-Covid policy in China impacting production for Apple with Foxconn," Dan Ives, analyst at Wedbush Securities, told AFP.

"It confirms the Street's fears with Apple this quarter and will be an albatross on the tech market this week."

- 'We are drowning' -

Local authorities locked down the area surrounding the factory on Wednesday, but not before reports emerged of a lack of adequate medical care at the plant.

Multiple workers have recounted scenes of chaos and increasing disorganisation at Foxconn's complex of workshops and dormitories, which form a city-within-a-city near Zhengzhou's airport.

"People with fevers are not guaranteed to receive medicine," a 30-year-old Foxconn worker, who asked to remain anonymous, told AFP.

"We are drowning," he said.

China is the last major economy wedded to a strategy of extinguishing Covid outbreaks as they emerge, imposing snap lockdowns, mass testing and lengthy quarantines despite the widespread disruption to businesses and international supply chains.

And authorities poured cold water on speculation that the policy could be relaxed Saturday, with National Health Commission (NHC) spokesperson Mi Feng saying that Beijing would "stick unswervingly to... the overall policy of dynamic zero-Covid".

"At present, China is still facing the dual threat of imported infections and the spread of domestic outbreaks," Mi said at a press briefing.

"The disease control situation is as grim and complex as ever," he said. "We must continue to put people and lives first."

Foxconn 'revises down' Q4 outlook over China Covid lockdowns
Taipei (AFP) Nov 7, 2022 - Taiwanese electronics giant and iPhone manufacturer Foxconn warned Monday that its last quarter earnings this year would take a hit from the coronavirus lockdowns affecting its assembly lines in the Chinese city of Zhengzhou.

"The company's visibility for the fourth quarter was originally 'cautiously optimistic', but due to the pandemic affecting some of our operations in Zhengzhou, the company will 'revise down' the outlook for the fourth quarter," Foxconn said in a statement.

Foxconn is the world's largest contract electronics manufacturer, assembling everything from Apple's iPhones and iPads, to Playstations, televisions, laptops and PCs.

The vast majority of its factories are in China, particularly the eastern city of Zhengzhou where authorities have imposed a series of lockdowns.

Those restrictions have hit just ahead of the Christmas period when there is usually a surge in consumer demand for electronics.

Foxconn did not give any statistical projection for how badly they expected earnings to be hit.

"Foxconn is now working with the government in (a) concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible," the company said.

Foxconn will hold an investor call on Thursday.


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INTERNET SPACE
iPhone factory lockdown shows risks of China dependence, analysts say
Beijing (AFP) Nov 3, 2022
The lockdown of Foxconn's Zhengzhou factory, the world's biggest producer of iPhones, has highlighted some of the risks of relying on zero-Covid China's manufacturing sector, analysts told AFP. Foxconn, Apple's principal subcontractor, has seen a surge in Covid-19 cases at its Zhengzhou site, leading the company to lock down the vast complex in a bid to keep the virus in check. Images then emerged of panicking workers fleeing the site on foot in the wake of allegations of poor conditions at the ... read more

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