Will the giant Apple Apple encounter difficulties in manufacturing its flagship products such as the iPhone?
After the reporting of 66 new cases of contamination and the resumption of the epidemic, faithful to its tradition of its zero Covid policy, the city of Shenzhen in China located on the border with Hong Kong has decided to confine this city of 17 million inhabitants.
Under these circumstances, Taiwanese electronics giant Foxconn, Apple’s main supplier, announced that it was suspending its activities in the Chinese technology hub in this city. “Foxconn’s business in Shenzhen, China has been suspended from March 14 in accordance with the local government’s new Covid-19 policy,” the Taiwanese company said in a statement.
Its largest factory in the world
Foxconn, which has its largest factory in the world in Shenzhen, which employs tens of thousands of people, largely manufactures cell phones from the Apple brand.
For now, the Taiwanese company, also known as Hon Hai Precision, has not specified how long it will keep its factory closed. However, it would have already relocated production to other sites in the country to limit the impact of this closure. For the time being, the city authorities have asked that non-essential businesses be closed until March 20.
“All the workers in the factories in the north of the city are on forced rest until this date, but it is also possible that some of the workers who live in dormitories on site will have limited activity”, explains Pierre Alain, a French expatriate who works as a production manager in an electronics factory.
“As soon as everything reopens, the factories will probably resume at an accelerated rate and work overtime, but there will inevitably be an impact on deliveries of several days or even a few weeks”, he analyzes.
Still, this closure is badly perceived by investors who fear other closures in China in the midst of the semiconductor crisis. Technology stocks of around 4% on the Hong Kong Stock Exchange on Monday.