Apple is facing supply constraints as production has halted at their biggest Chinese factory, due to ongoing protests at the Zhengzhou plant. According to a person familiar with the matter and the assembly operations, the situation remains fluid at the plant and the estimate of lost production could change.
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The manufacturing facility is managed by Foxconn Technology Group, who has been a primary manufacturer of Apple devices for many years. The Taiwanese company is trying to get workers back to the plant, but the vast majority is still protesting the draconian Covid restrictions imposed by the Chinese government, many of which became violent. Lockdowns could be implemented for several more weeks by the communist state, which could hurt production even further.
Lockdowns have caused huge food shortages, non-working services and basic needs have been neglected. This is why the Chinese are starting to revolt against the government, the first real pushback since the 1989 protests culminating in the Tiananmen Square massacre.
The Foxconn facility produces the vast majority of iPhone 14 Pro and Pro Max devices, Apple’s most in-demand handsets this year. Those premium phones have picked up the slack for slumping demand for the regular iPhone 14 models. Apple lowered its overall production target to about 87 million units from an earlier projection of 90 million units.
While Apple and Foxconn are yet to comment, the situation highlights how dependant Apple has become on its Chinese operations. The Zhengzhou complex, also known as iPhone City, has been trying to incentivise the workforce to make sure it hits production targets. For example, it is offering large bonuses to workers that are willing to stay at the plant and continue working amid the conflicts.
According to analysts at Morgan Stanley, it is expected that Apple will deliver 6 million units less than expected in the fourth quarter of this year. They said that the worst-case scenario would be no further iPhone deliveries this quarter, which would lead to a 20 percent shortfall on shipped units.
