COVID Outbreak Shuts Down Largest iPhone Manufacturing Facility
November 3, 2022 at 12:54 p.m.
The largest iPhone factory in the world, located in Zhengzhou, China, has ceased operations due to a COVID outbreak at the facility. The shutdown comes at an inopportune moment for Apple as it struggles to meet iPhone 14 Pro demand before the busy Christmas shopping season begins.
China’s draconian zero-COVID policies and an ineffective vaccine seem to have exacerbated the disease. By shutting down and quarantining large segments of its population, Chinese people seem to have evaded natural immune protection that most of the world has acquired.
Indeed, a large swath of the Chinese population hasn’t been exposed to COVID, which seems to have extended the nation’s crisis due to a lack of acquired immunity to the disease. As other countries are moving on with post-pandemic life, low levels of natural antibodies in China and its zero-COVID policy still result in massive shutdowns, which in some cases, have caused civil unrest.
China’s Sinovac COVID vaccine is also partly to blame. Although it’s somewhat effective, it takes three doses to offer the same protection as two doses of the Pfizer/BioNTech vaccine. China has yet to approve any mRNA or DNA vaccines, making vaccination efforts less successful.
The lockdown resulted in hundreds of workers fleeing Zhengzhou by foot to avoid being stranded in the industrial city. Chinese authorities say the lockdown will last seven days — an eternity in the world of high-tech manufacturing.
Last week, Apple announced quarterly profits and admitted that the iPhone 14 Pro models were “supply constrained.” Although the Foxconn factory shutdown may only last a week, this comes right before the busy Christmas shopping season. Prior to this development, it took a month for a customer to receive their iPhone 14 Pro. If you’re planning on gifting an iPhone this year, put the order in soon if you want it to arrive by Christmas.
Apple is well aware that putting all of its manufacturing eggs in one basket is a risky proposition. The company is gradually expanding manufacturing in India and Vietnam to offset Chinese manufacturing’s unpredictability.
Apple is already manufacturing its base iPhone 14 devices in India, with more plans to increase production in the South Asian nation. Recently, Tata began hiring 45,000 workers at its plant producing iPhone components and is in talks with Apple about manufacturing complete iPhone models.
Although Apple’s iPhone business is growing, it failed to live up to quarterly estimates. The company released guidance that it expected to earn $43.21 billion from its iconic smartphone. Instead, the company only posted $42.62 billion in iPhone revenue. Although this is an almost ten percent increase over last year, more was needed to appease investors.
Before the shutdown, the Zhengzhou facility began practicing closed-loop production. Workers were quarantined in dormitories and prevented from interacting with outsiders. This move alone decreased global iPhone supply by 10%. Although Foxconn compensated for the change by canceling an upcoming production decrease, closing the factory for seven days will further impact iPhone supply this holiday season.