Days after reports of Foxconn employees hopping fences and fleeing from their jobs, a report late Wednesday from Taiwan News says Apple’s biggest iPhone factory is now on “total lockdown.” These new restrictions may have a big impact on Apple’s sales during the crucial holiday period.
Foxconn, whom Apple contracts to manufacture the lion’s share of iPhones, Macs and other Apple products, has had employees stay in on-site dormitories in a “closed-loop system” to prevent COVID outbreaks. Employees have been complaining about the “increasingly unsafe and inhumane working conditions” of the dorms.
If true, the situation could have knock-on effects on Apple’s bottom line during the critical holiday quarter. China’s strict zero-COVID policy has been hard on Silicon Valley, though Cupertino has braved through most of it unscathed. (Who do they have running that place, some kind of supply chain genius?)
Apple has worked very hard over the last two years to maintain its supply chain. While Apple hasn’t slowed down the rollout of new iPhones, still hitting its fall release schedule every year, the Mac and iPad lines have certainly been affected.
Apple’s “two-year transition” of the Mac line to Apple silicon is now entering its third year this November with two Macs still for sale today with the old Intel chips inside. Limited capacity led to months-long wait times for new Mac products like the Studio Display and Mac Studio upon their release.
Thinking long term, it appears Apple is trying to diversify its sources of production. It is currently ramping up iPhone manufacturing in India and is reported to be testing a production line for Apple Watch in north Vietnam.
In a few years’ time, this will definitely afford them more resilience in Apple’s supply chain. It may also give it a better position of power when negotiating with the totalitarian Chinese government, for which Apple has been criticized.
Via: Taiwan News.