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Analyst says Covid-19 threatens more than 10% of global iPhone output at #1 factory

Analyst says Covid-19 threatens more than 10% of global iPhone output at #1 factory

Analyst says Covid-19 threatens more than 10% of global iPhone output at #1 factory

(Yicai Global) Oct. 31 — The recent Covid-19 outbreak at Apple’s largest global production base has overshadowed more than 10 percent of global iPhone production capacity, according to an analyst.

Hon Hai Precision Industry, parent company of Foxconn, has entered into a “closed-loop” management system at the plant in Zhengzhou, central China, which may have an impact on the production of Apple contract manufacturer, Guo Ming-chi, an analyst at Tianfeng International Securities , yesterday. The Covid era system means that employees only interact with co-workers, and sleep in the factory.

The new Taipei-based company said in its latest statement that Zhengzhou Industrial Park is cooperating with the local government in Henan Province to control the epidemic situation, while Foxconn will coordinate with other factories to support production to reduce the potential impact.

Shares of Foxconn affiliates fell after the announcement. FIH Mobile [HK: 2038] It closed down 4.9 percent at 0.64 Hong Kong dollars (8 US cents). Foxconn Industrial Internet share price [SHA: 601138] It fell 1 percent to 8.20 Chinese yuan (1.10 US dollars).

Foxconn’s capacity is expected to gradually improve in the coming weeks, so anti-epidemic measures are expected to have a limited impact on production in the fourth quarter, Guo said, adding that Apple has not changed its overall estimate of iPhone production.

Guo said the US company is checking its options as it is discussing with Taipei-based Pegatron and Shenzhen-based Luxshare Precision Industry to update some production lines of the iPhone 14 and iPhone 14 Plus to make the iPhone 14 Pro and iPhone 14 Pro Max. But Luxshare, the connector cable maker that reported less 2021 revenue than Foxconn did per month, could produce its first iPhone 14 Pro in the first quarter of 2023 at the earliest.

China has the largest global share of Apple suppliers. The California-based tech giant had 190 suppliers last year, and more than 50 of them were based in mainland China, according to an Apple report released this month. Meanwhile, Foxconn’s factory in Zhengzhou is Apple’s largest production base in the world with more than 90 production lines and about 300,000 workers.

Foxconn is important to the province as the manufacturer’s foreign trade accounted for up to 67.5 percent of Henan’s imports and exports in 2015, up from about 29 percent in 2011. The effect of aggregation is seen with the entry of many smart phone brands into the Zhengzhou Airport Economic Zone. , following the main manufacturer.

The value of China’s smartphone exports accounted for 27 percent of global smartphone sales in 2019, a quarter of which came from Henan, according to IDC data.

Editors: Shi Yi, Amy Lin, Xiao Yi



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