hard hit to Manzana in Chinasince the government has ordered the closure for seven days of the surroundings of the “city of the iPhone”. Plant Foxconn Technology Group in Zhengzhou is considered one of the factories of the aforementioned firm biggest in the world. What will reduce the shipments inside and outside of it, according to Bloomberg News on Yahoo Finance.
The lockdown will last until November 9said the local government in a statement posted on its Twitter account. wechat. He ordered people and vehicles off the streets except for medical or other essential reasons, a ban that threatens to cut off the flow of workers and additional components needed to ramp up production ahead of the holiday season.
Abrupt action reflects focus Beijing Covid Zero and is likely to further disrupt Foxconn’s main base of operations, which produces roughly four out of five of Apple’s latest phones. The Taiwanese company, whose main listed branch is Hon Hai Precision Industry Co., it was already dealing with a Covid-19 outbreak that forced some of its 200,000 employees to quarantine and pushed others to flee the facility, some on foot.
The government notice came after Zhengzhou will report that Covid-19 cases rose to 359 on Tuesday, more than triple the previous day.. In recent days, officials have progressively imposed a web of smaller lockdowns and restrictions on areas as small as an apartment block.
“The plant will continue to operate within a “closed loop” or a self-contained bubble that limits contact with the outside world,” Foxconn said in a statement. But the company did not address questions about how it will ship products in and out of the complex during the area lockdown. An Apple representative did not immediately respond to a request for comment.
The blockade comes at a crucial time for Apple, which launched the iPhone 14 during an unprecedented drop in global demand for electronics. While it fared better than other smartphone makers, the company backed off plans to ramp up production of its new iPhones this year after an anticipated surge in demand failed to materialize, Bloomberg reported. Apple has posted better-than-expected results but warned of a holiday slowdown.
Foxconn has tried to mitigate the potential disruption raising wages and arranging support from its other Chinese plants in case the assembly lines stop in Zhengzhou. In the last few days, she too struggled to quell speculation on social media that some of the infected staff had died.
In previous lockdowns, government officials have allowed not only essential services but also key local businesses to avoid Covid restrictions. Many major companies in Shanghai and the southern metropolis of Shenzhen, for example, continued to operate even when other factories lacked manufacturing components.
The Zhengzhou factory also should have stored enough components to keep operating for a while, so much would depend on the length of the lockdown: officials in other parts of China have sometimes dragged out such actions for months.
It is unclear whether Foxconn has negotiated alternative solutions with the local Zhengzhou government. Any interruption there threatens messing up Apple’s finely orchestrated supply chain. Thousands of components from Europe to Asia are shipped to Zhengzhou, manually assembled into devices, and then shipped to the rest of the world.
That single facility is responsible for the 80% of the capacity of the iPhone 14 series, with more than 85% of the capacity of the iPhone 14 Pro based there, according to Counterpoint Senior Analyst Ivan Lam.
Manzanaclosed the session on Tuesday at $150.53 and the 70 and 200 period moving averages are above the last three candlesticks. Meanwhile, the Ei indicators are mixed.