Has Apple Passed Its Worst?..."Chinese iPhone Factories Recover 70% of Operations"

[Asia Economy New York=Special Correspondent Joselgina] Amid the continued spread of COVID-19 in China, Foxconn's Zhengzhou plant, the production base for Apple iPhones, has recovered to 70% operational capacity and is accelerating its return to normal. The waiting time for some iPhone models, which previously took up to 40 days, has also been reduced to 1-2 weeks.

[Image source=Reuters Yonhap News]

The Wall Street Journal (WSJ) reported on the 29th (local time), citing analysts and supply chain insiders, that Foxconn's Zhengzhou plant is currently operating at about 70% of its main production facilities. The Zhengzhou plant is a key production base responsible for about 80% of the iPhone 14 series. In particular, most of the high-end models, the iPhone 14 Pro and Pro Max, are produced here.

Earlier, Samik Chatterjee, an analyst at JP Morgan, wrote in a memo to investors regarding the iPhone 14 Pro that "supply is improving and gradually moving in a direction similar to demand." The waiting time for the iPhone 14 Pro in the U.S., which once took up to 40 days, has also improved. Currently, the waiting time for iPhone 14 Pro models on Apple sites in both the U.S. and China is confirmed to be about 1-2 weeks. Some models and colors are available for immediate delivery upon order.

WSJ conveyed the atmosphere by stating, "Analysts and supply chain insiders say that while the situation in China is far from fully normalized, it is at least better than during the Foxconn worker clashes last November." The outlet emphasized that "models such as the iPhone 14 Pro Max, starting at around $1,100, are essential to Apple's strategy to increase profitability in the global smartphone market, which is experiencing slowing growth."

This year, the Zhengzhou plant has faced difficulties in normal operation due to mass infections among workers caused by the spread of COVID-19 in China, strict lockdown policies under the 'zero COVID' approach, and workers leaving the factory and protesting in response. Last month, there was even an incident where workers clashed with police while fleeing in protest against the lockdown policies.

As China has eased COVID-19 restrictions, the health of workers is now considered the biggest variable affecting factory operations. WSJ reported that "although the exact number of Foxconn Zhengzhou plant workers infected with COVID-19 is unknown, there were many suspected cases showing symptoms such as fever."

Taiwanese market research firm TrendForce also analyzed that China's labor shortage is impacting the supply chain. TrendForce estimated that iPhone shipments in the first to third quarters will total 47 million units, a 22% decrease compared to the same period last year.

Meanwhile, Apple, which had been experiencing a continuous decline due to concerns over production disruptions, is rebounding in the New York stock market today. As of the afternoon near market close, Apple's stock price is trading around $129.75, up 2.94% from the previous session.