Apple iPhone production at Foxconn plant to hit ahead of holiday season

Foxconn is likely to face significant drop in production of Apple iPhones at its plant in China in November after the latest bout of worker unrest this week, as thousands of employees quit.
Apple supplier FoxconnChina’s strict COVID-19 restrictions the world’s largest Apple iPhone factory fuelled discontent among workers and disrupted production ahead of Christmas and January’s Lunar New Year holiday, as many workers were either put into isolation or fled the plant.

Foxconn could now see more than 30 percent of the site’s November production affected, up from an internal estimate of up to 30 percent when the labour issues erupted in late October, Reuters news report said.

The Zhengzhou factory is the only one that makes premium iPhone models, including the iPhone 14 Pro, and it is unlikely to resume full production by the end of this month.

“The worker unrest at Foxconn’s plant in China could weigh on Apple’s November iPhone shipments,” Victoria Scholar, head of investment at Interactive Investor said, as concerns grow over Apple’s ability to deliver products for the busy holiday period.

U.S. Best Buy said it expected high-end iPhones to be in short supply at stores this holiday season. Analysts said iPhones at Apple stores in the United States during the Black Friday shopping season were also down from a year earlier, and it was taking longer to replenish stocks, Reuters reported this week.

KGI Securities analyst Christine Wang said if the current issue lasts through December, around 10 million units of iPhone production will be lost, which translates to 12 percent lower iPhone shipment in the last quarter of 2022.

Wedbush Securities estimates many Apple stores now have 25 percent to 30 percent fewer iPhone 14 Pros than normal heading into the holiday shopping season.

In a statement on Nov. 7, Apple said it expected lower iPhone 14 Pro and iPhone 14 Pro Max shipments than previously anticipated.

“We see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products,” Apple said earlier.

Foxconn’s revenue in the third quarter of 2022 rose 24 percent to NT$1.7466 trillion, mainly due to strong demand for consumer smart products.

Foxconn earlier indicated that its capital expenditure next year will be higher than this year in order to maintain the competitiveness of existing ICT business and expand new ones under the “3+3” strategy.

Among the regions, China will still account for the highest overall Capex ratio, while production capacity expansion will continue for Taiwan, Vietnam, India, Mexico, the United States, and the Czech Republic, in response to customer and market demands, Foxconn said.