TAIPEI, Nov 25 (Reuters) – Foxconn’s (2317.TW) flagship iPhone plant in China is set to see a further reduction in November shipments after the latest bout of worker unrest this week, a source with direct knowledge of the matter said on Friday, as thousands of employees quit.
The world’s largest Apple (AAPL.O) iPhone factory has been grappling with strict COVID-19 restrictions that have 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.
Following Wednesday’s escalation that saw workers clash with security personnel, Foxconn could now see more than 30% of the site’s November production affected, up from an internal estimate of up to 30% when the labour issues erupted in late October, the source said.
The factory is the only one that makes premium iPhone models, including the iPhone 14 Pro, and the source said it is unlikely to resume full production by the end of this month.
Foxconn, formally known as Hon Hai Precision Industry Co, declined to comment. Apple, which said on Thursday it had staff at the factory, did not respond to a request for comment on Friday.
“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.
Apple shares were down 1.9% in late morning trade on Friday, while the benchmark Nasdaq index was down 0.3%.
“Apple is still viewed as one of the more resilient stocks in the tech sector… However, Apple continues to hold off from providing official guidance given the macroeconomic uncertainty,” Scholar added.
U.S. Best Buy Co Inc (BBY.N) said on Tuesday 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.
LOWER SHIPMENTS
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% lower iPhone shipment in the last quarter of 2022.
[1/2] The logo of Foxconn is seen outside the company’s building in Taipei, Taiwan November 10, 2022. REUTERS/Ann Wang
Wedbush Securities estimates many Apple stores now have 25% to 30% fewer iPhone 14 Pros than normal heading into the holiday shopping season.
In a statement on Nov….
Read More: Foxconn unrest risks iPhone shipments, weighs on Apple shares