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Unrest at one of China’s biggest manufacturing centers may cause a production shortfall this year of possibly 6 million Apple iPhone Pros, according to a source cited by Bloomberg.
The Foxconn Technology
2354,
facility in Zhengzhou, which makes the majority of Apple’s premium and most popular phones, has been struggling with staff agitation for weeks as Chinese workers rebel against the Communist regime’s draconian COVID-19 lockdown policy.
A resurgence of unrest over the weekend, which included protest across China, may exacerbate the situation, according to Bloomberg’s source who has knowledge of Foxconn’s assembly lines.
Apple
AAPL,
recently lowered its overall production target from 90 million units to 87 million units. However, Foxconn believes it can make up any shortfall from Zhengzhou in 2023.
Frustration over lingering COVID-19 lockdowns in China and concerns about tensions between Washington and Beijing has encouraged Apple to look elsewhere for production sites, and it has recently begun building iPhone 14s in Chennai, India.
According to JP Morgan analysts, Apple intends to manufacture 25% of all its products outside China by 2025, compared to 5% currently.
Apple’s stock has dropped 17% this year, nearly in line with the 16% pullback for the broader S&P 500
SPX,
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