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Chinese authorities have announced a seven-day coronavirus lockdown in the area around the world’s largest iPhone factory, stoking concern that production will be severely curtailed ahead of the Christmas period. Foxconn’s plant in Zhengzhou, which employs about 200,000 people, produces the majority of Apple’s (AAPL, $145.03) new phones, including the new iPhone 14.
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Analysts said the chaos at Zhengzhou could jeopardize Apple and Foxconn’s output in the coming weeks and have estimated that between 10% and 30% of iPhone 14 production could be affected in the near term if the situation did not stabilize. Foxconn, formally Hon Hai Precision Industry Co Ltd, is Apple's biggest iPhone maker, accounting for 70% of iPhone shipments globally.
Why it matters
Apple still relies heavily on China for the majority of its iPhone production, but the tech giant has been diversifying its supply chain. The company announced in September that it is assembling its flagship iPhone 14 in India in an attempt to shift some production away from China, for example. However China’s president, Xi Jinping who has insisted on a “zero Covid” policy - is throwing a spanner into Apple’s iPhone production in the interim.
