After China announced a few days ago a lockdown that impacted three main factories that manufacture Apple products, Foxconn now says it’s starting to operate the Zhengzhou factory “normally.” That said, ten of thousands of workers will have to undergo mandatory COVID-19 testing, which could present “a potential risk to a global supply of Apple’s signature device,” according to a new report.
Bloomberg says that the primary iPhone-making complex in Zhengzhou has ordered compulsory testing for areas that include the plant and adjacent parts of the city by local authorities.
The mass-testing exercise represents a risk because Chinese officials have been quick to lock down areas in the event of positive tests. This week, more than 30 Taiwanese companies including iPhone assembler Pegatron Corp. and Apple laptop maker Quanta Computer Inc. have now halted production in the electronics hubs of eastern China to comply with local Covid-related restrictions, spelling more trouble for an already fragile global tech supply chain.
Although Foxconn is trying to catch up with iPhone productions, analyst Ming-Chi Kuo warns that “the potential supply disruption has become a structural risk that Apple and investors can’t ignore in the foreseeable future.”
Different from other countries, China is betting on a zero-tolerance approach to COVID-19 including rapid lockdowns if even a small number of people test positive, reports Bloomberg. Foxconn stated that it’s complying with governments measures:
Foxconn is complying with the local government’s Covid-combating measures. Operations in Zhengzhou are normal right now.
Yesterday, Ming-Chi Kuo said ship dates for some Apple products have slipped after the lockdown in China. While the high-end MacBook Pro becomes harder to find, the iPhone SE 3 is still widely available, showing the lackluster demand for the product.
With mandatory COVID-19 testing in Zhengzhou, we’ll have to see for how long the primary iPhone factory in China will operate as normal.
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