iPhone factory lockdown shows risks of China dependence, analysts say - Tech Xplore

The lockdown of Foxconn's Zhengzhou factory, the world's biggest shaper of iPhones, has highlighted immoderate of the risks of relying connected zero-COVID China's manufacturing sector, analysts told AFP.

Foxconn, Apple's main subcontractor, has seen a surge successful COVID-19 cases astatine its Zhengzhou site, starring the institution to fastener down the immense analyzable successful a bid to support the microorganism successful check.

Images past emerged of panicking workers fleeing the tract connected ft successful the aftermath of allegations of mediocre conditions astatine the facility, which employs hundreds of thousands of workers.

Foxconn is China's biggest backstage assemblage employer, with implicit a cardinal radical moving crossed the state successful its astir 30 factories and probe institutes.

But Zhengzhou is the Taiwanese giant's crown jewel, churning retired iPhones successful quantities not seen anyplace else.

"In a mean situation, astir each the iPhone accumulation is happening successful Zhengzhou," said Ivan Lam, an expert with specializer steadfast Counterpoint.

Risk of 'strong dependence'

Apple manufactures much than 90 percent of its products successful China, which is besides 1 of its astir important markets.

"For Apple, it is erstwhile again a atrocious illustration successful presumption of the stableness of accumulation chains," Alicia Garcia Herrero, Asia-Pacific manager for Natixis bank, told AFP.

Experts accidental the company's dense dependence connected China "brings imaginable risks, particularly erstwhile the US-China commercialized warfare shows nary signs of de-escalating," according to Dezan Shira & Associates, a consulting firm.

Opened successful 2010, the Zhengzhou mill employs up to 300,000 radical who unrecorded on-site each twelvemonth circular —creating a sprawling tech hub known arsenic "iPhone city".

It is made up of 3 factories, 1 of which produces the iPhone 14—Apple's newest handset model.

Apple did not respond to AFP's petition for remark connected however precisely the lockdown volition impact its production.

Analyst Lam estimates the partial stopping of enactment astatine the tract resulted successful a nonaccomplishment of "10 to 30 percent" of output, but said portion of the accumulation has besides been temporarily moved to different Foxconn sites successful China.

According to Foxconn, the tract is presently operating a "closed loop" with the workers avoiding each interaction with the extracurricular world, portion their regular bonuses person been quadrupled.

"This incidental whitethorn person a constricted impact," connected worldwide iPhone production, estimated expert Ming-Chi Kuo, who specialises successful Apple products.

"But suppliers successful China indispensable larn to amended closed-loop accumulation ratio successful effect to the zero-COVID policy," helium added.

Looking elsewhere

China is the past large system committed to a zero-COVID strategy, persisting with drawback lockdowns, wide investigating and lengthy quarantines successful a bid to stamp retired emerging outbreaks.

But caller variants person tested section officials' quality to snuff retired flare-ups faster than they tin spread, causing overmuch of the state to unrecorded nether an ever-changing mosaic of COVID curbs.

Apple has already begun outsourcing portion of its accumulation to India and is eyeing Vietnam successful a bid to wean itself disconnected Chinese manufacturing—a inclination accelerated by COVID.

But that's not truthful simple—last year, astir 7.5 cardinal iPhones were made successful India, conscionable 3 percent of Apple's full production.

"Increasing the capableness of factories (in India) is difficult," Lam said.

© 2022 AFP