Foxconn, Apple’s largest iPhone foundry, said on November 7 that it is working hard to resume full production at its Zhengzhou factory as soon as possible, and lowered its fourth-quarter performance forecast.
Foxconn said that the province of Henan, where its Zhengzhou factory is located, has made it clear that it will, as always, fully support the company’s development. The company is now working with the government to stamp out the epidemic and resume full-capacity production as soon as possible. A Foxconn insider told National Business Daily, “It is expected that the local epidemic will be significantly under control after this week. With the support of the government and our customers, we expect to return to full capacity in late November.”
At the same time, Foxconn lowered its fourth-quarter performance outlook. Previously, guidance for the fourth quarter results was “cautiously optimistic”. In October this year, the company’s sales increased by 40.97% year-on-year to NT $776.6 billion ($24 billion), setting a record for the same period.
Apple also said today that the production capacity of iPhone Pro and Pro Max in the Zhengzhou factory is limited, and shipments of these two high-end models will be lower than expected. Apple will give priority to the health and safety of workers in the supply chain. On October 30, Ming-Chi Kuo, an analyst at TF International Securities, published a forecast and analysis of Foxconn’s production capacity. He believes that more than 10% of iPhone production in the world would be affected.
Previously, due to the epidemic in Zhengzhou, many Foxconn employees chose to return home on foot. After the company began to fight back on a series of negative rumors, production seemed to be back on track. On November 1, Foxconn issued a policy, in which integrated Digital Product Business Group (iDPBG) employees in Zhengzhou would be subsidized 400 yuan ($55.3) every day for attendance, and the total bonus for full attendance in November would be more than 15,000 yuan.
On November 7, Foxconn’s iDPBG in Zhengzhou started recruitment, and workers will join in the company with a wage of 30 yuan/hour until February 15th, 2023. In order to encourage former employees to return to the factory, returnees who left their jobs from October 10 to November 5 will be given a care subsidy of 500 yuan after re-joining.
At present, Foxconn has begun to build up its capacity reserve at other factories such as the one in Shenzhen. The two factories in Shenzhen mainly develop and trial-produce Apple’s iPhone and, currently, one of them is recruiting high-priced hourly workers. From November 2022 to January 31, 2023, the salary is 21 yuan/hour, for producing, assembling and testing Apple’s mobile phones.