FAST FIVE: Foxconn Riot Could Cut China IPhone Production By More Than 30%

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Foxconn Riot Could Cut China iPhone Production By More Than 30% Apple's top manufacturing partner, Foxconn Technology Group, is set to see November iPhone shipments from a massive factory in Zhengzhou, China, known as iPhone City, plunge after a week of unrest, Reuters said, citing a source with direct knowledge of the matter.  They said iPhone production would be slashed by more than 30% at Foxconn's Zhengzhou plant in November versus an earlier estimate of up to 30% when problems at the factory began in late October.  Most of the 200,000-person workforce has been living in isolation since last month.

New hires were brought in recently as management wanted to keep churning premium iPhone models, including the iPhone 14 and 14 Pro.  But Foxconn failed to live up to its promises of higher pay for new hires, which sparked a riot across the world's largest iPhone factory earlier this week.

To squash the violence, Foxconn began distributing 10,000 yuan ($1,400) to newly recruited workers to leave by Thursday.

It will be costly, but it will be less costly than only relying on China and then China doesn't open up,” Alicia Garcia Herrero, chief Asia Pacific economist at Natixis, said.  In early November, Foxconn revised its earning expectations down for Q4 on zero Covid disruptions at the assembly facility, while Apple warned iPhone capacity would be reduced.

After chaos this week, more downward revisions could be ahead.  Tyler Durden Sat, 11/26/2022 – 14:00.

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