Apple supplier Foxconn also reported a sharp drop in revenue in November as a result of COVID-19 restrictions and subsequent worker revolt in a plant in China.
The Taiwanese company said that the “epidemic situation” has been brought to control in its Zhengzhou factory in central China, known as iPhone City. The production was “gradually” moving toward normal levels, it said in a statement.
“In addition to re-allocating production capacity to different factories, we have also started to recruit new employees,” it added, noting that the outlook for the fourth quarter would roughly be in line with market expectations.
The firm said that November revenue was down 29% compared to October and over 11% lower than at the same time last year. It said the dip was due to “production gradually entering off-peak seasonality and a portion of shipments being impacted by the epidemic in Zhengzhou,” without elaborating further.
The Zhengzhou plant is expected to resume full production around late December to early January, according to Reuters. Foxconn is believed to assemble 70% of iPhones. Its Zhengzhou factory manufactures most of Apple’s premium phone models, including the iPhone 14 Pro.
China’s strict zero-COVID policy hit the plant after a coronavirus outbreak in October. The facility was locked down, which led to panic among the employees. Many fled over fears for their safety and food shortages. In response, Foxconn hired new employees and promised bonuses to incentivize workers.
However, new hires complained that bonus payments were delayed and clashed with security guards last month. Foxconn said that bonuses were delayed due to a “technical error.” It offered cash payments to disgruntled employees to leave.
Apple said at the time that due to the Zhengzhou facility “currently operating at significantly reduced capacity,” it would ship fewer iPhones despite strong demand ahead of the holiday season. Customers were warned that delivery waiting times would be longer than usual.
It was reported that problems in Zhengzhou were pushing Apple to diversify its supply chains, with production shifts to India and Vietnam.
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