20,000 Workers Leave Foxconn Factory in China... Apple iPhone Production in Crisis

One-Tenth of Employees Leave Factory
30% Decrease in Production Unavoidable

Foxconn Workers Confronting Police and Security Guards

[Asia Economy Reporter Lee Ji-eun] It has been reported that 20,000 workers have left the Foxconn factory in Zhengzhou, China, the world's largest iPhone production base. With a mass resignation of employees ahead of the Christmas peak season, Apple’s iPhone production is facing an emergency.

On the 25th, major foreign media reported that more than 20,000 newly hired workers left the Foxconn iPhone manufacturing plant in Zhengzhou, China. Foxconn had planned to fully restart production facilities by the end of this month, but with about one-tenth of the total workforce leaving the factory, operations have ultimately been disrupted.

Foxconn is an electronics manufacturer assembling Apple’s iPhones and iPads, responsible for 70% of the global iPhone production. Of this, 60% of the products are concentrated in the Foxconn factory in Zhengzhou City, China, and shipped to the United States and Europe. In particular, over 80% of the popular iPhone 14 series and more than 85% of the Pro models are produced here.

However, since mid-October, Zhengzhou City has locked down the Foxconn factory, where 200,000 workers are employed, to prevent the spread of COVID-19, causing a sharp decline in Apple’s iPhone production. Apple’s Q4 shipment volume, initially expected to be around 80 million units, is now forecasted to decrease by 2 to 3 million units.

In response, Foxconn launched a large-scale recruitment drive with incentive payments, but employee dissatisfaction escalated. On the 23rd, factory workers protested, claiming unfair treatment such as postponing the promised bonus payment date and forcing COVID-positive workers and other employees to stay in the same dormitory. Major foreign media reported that Foxconn issued a statement the day before blaming a computer error for wage arrears, which triggered clashes between workers and security guards.

With disruptions in product manufacturing ahead of the Christmas peak season when iPhone demand increases, Apple’s sales are expected to suffer significant damage. Last year, 36% of the total iPhone shipments of 235.7 million units, or 84.9 million units, were produced in the fourth quarter.

Wedbush Securities analyst Daniel Ives said, "Due to the factory shutdown, Apple is expected to lose $1 billion per week," and forecasted that iPhone production could decrease by up to 30% this month following the workers’ protests.