iPhone creator Foxconn reports a decrease in revenue following turmoil and the Covid explosion at a key China plant

iPhone creator Foxconn reports a decrease in revenue following turmoil and the Covid explosion at a key China plant

December 7, 2022: -Foxconn, the world’s most significant contract electronics maker, reports a sharp decrease in November revenue on Monday after the company fought with a Covid outbreak and employee unrest at the huge iPhone factory in the world in China.

The Taiwanese company, Hon Hai Precision Industry Co, stated that revenue in the previous month totalled 551.1 billion new Taiwan dollars ($14.7 billion), down over 29% versus October and over 11% lower related to November 2021.

Foxconn stated that the decrease was due to “production gradually entered off-peak seasonality and a portion of shipments being affected by the epidemic in Zhengzhou.” The company provide no further details.

Zhengzhou, China’s city, is home to the significant iPhone assembly plant which Foxconn runs.

In late October, the Zhengzhou factory was reached with an outbreak of Covid, and Foxconn was fighting to get it under control with measures like testing and isolating infected workers and effectively locking down the plant.

Many workers fled the factory following the outbreak started.

In the previous month, employees were clashing with security personnel at the Zhengzhou plant, and a few workers took to social media to air their grievances more than what is coming to be a delay in bonus payments. Foxconn apologized for a “technical error” causing the issues with workers’ pay.

Foxconn started a round of bonuses last month to entice workers back to the factory.

Foxconn did not show the rare worker unrest in its November earnings but said the Covid outbreak was under control.

“At present, the epidemic situation has been under control, with November being the period affected by the epidemic,” the company added.

“In addition to reallocating the production capacity of different factories, we have started to recruit recent employees and are gradually moving toward restoring production capacity to normal. The outlook for the fourth quarter is anticipated to be in line with market consensus,” it said.

Investors will be anticipated any impact on Apple, stating its reliance on the Zhengzhou factory for global iPhone production.

Analysts at Evercore ISI added that the issues at Foxconn affected the production of between 5 million and 8 iPhone units in December, mostly at the high end of Apple’s smartphone range.

The advisory firm added that this could negatively affect Apple’s revenue by $5 billion to $8 billion.

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