A violent worker uprising at the world’s largest iPhone factory in central China this week has further disrupted Apple’s tight supplies and how the country’s strict zero-Covid policy is hurting global tech companies. I’m emphasizing the dolphin.
The problem started last month when workers left a factory campus in Zhengzhou, the capital of central Henan province, amid Covid fears. In the event of staff shortages, employees were offered bonuses for returning.
But protests erupted this week when a newly hired employee said management didn’t keep their promises. Workers who clashed with guards in hazmat suits were eventually offered cash to quit and leave. Analysts said troubles at Taiwanese contract manufacturer Foxconn, a top Apple supplier that owns the facility, will also accelerate the pace of diversification away from China into countries like India.
Daniel Ives, his director of equity research managing at Wedbush Securities, the ongoing production disruption at his Foxconn’s sprawling campus in central China’s Zhengzhou city is a “albatross” for Apple. ”
“Every week of this shutdown and riot, we estimate that Apple is losing about $1 billion in iPhone sales a week. It could be off the table,” he said.