Foxconn Technology Group, the world’s largest electronics contract manufacturer and Apple’s main supplier, has halted production at two of its factories in the eastern city of Kunshan, further straining the US tech giant’s supply chain in mainland China.
Operations have been suspended since Wednesday last week after new Covid-19 cases were reported at the two plants, where employees are confined to dormitories within those campuses, according to two workers at the affected factories, who declined to be named because they are not authorized to speak to the media.
Those two dormitories have been put under strict lockdown, according to a statement from local government agencies on Thursday.
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The affected Foxconn plants in Dianfa and Fuhong in northern Kunshan are two of four manufacturing sites operated in the city by the Taiwanese company formerly known as Hon Hai Precision Industry. Located in the eastern coastal province of Jiangsu, Kunshan is home to many factories operated by Taiwan-based electronics companies.
Two out of four Foxconn Technology Group sites north of the city of Kunshan have been under strict lockdown from April 20, 2022 after the Apple supplier reported new confirmed Covid-19 cases. Photo: Ann Cao alt=Two out of four Foxconn Technology Group sites north of the city of Kunshan have been under strict lockdown from April 20, 2022 after the Apple supplier reported new confirmed Covid-19 cases. Photo: Ann Cao>
The sudden shutdown of operations at the two Foxconn plants last week came after authorities in Kunshan were expected to ease travel restrictions and allow manufacturing activities to resume in the city.
Earlier last week, the local government gave the green light to a first group of 60 companies to reopen their manufacturing facilities. Kunshan, home to 2.1 million people, launched a city-wide lockdown earlier this month to stem the spread of the Omicron variant and stem a possible spillover from Shanghai, which has been battling its worst Covid-19 outbreak.
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Kunshan is about 51 kilometers from neighboring Shanghai to the east. On Friday, Kunshan reported 23 new Covid-19 cases, up from single digits a week ago.
Foxconn’s decision to suspend operations at its two Kunshan plants is a setback for the Apple supplier, which managed to continue production during the citywide lockdown by implementing a “closed-loop” system that Restricts employees on its campus.
Police officers with personal protective equipment are seen in front of a Foxconn Technology Group campus in Kunshan, April 23, 2022. Local authorities have restricted access to roads around Foxconn’s four manufacturing plants in the city. Photo by Ann Cao alt=Police wearing personal protective equipment is seen outside a Foxconn Technology Group campus in Kunshan, April 23, 2022. Local authorities have restricted access to roads around Foxconn’s four manufacturing plants in the city. Photo: Ann Cao>
The move has also unnerved Apple’s supply chain network in mainland China, as some other contract manufacturing partners in the country have halted production due to Covid-19 restrictions.
Foxconn did not immediately respond to a request for comment on Saturday.
According to TF International analyst Ming-Chi Kuo, the company should help balance iPhone and iPad shipments in China after two other Taiwanese Apple suppliers, Pegatron Corp and Compal Electronics, halted production at their factories in Kunshan Securities, who follows Apple, in a recent post on Twitter.
Pegatron has halted production of personal computers, communications devices and consumer electronics for unnamed brands in Kunshan and Shanghai, a company spokeswoman confirmed on Tuesday.
“A full resumption of production [in Shanghai and Kunshan] possibly not until late April or early May,” Kuo said in his tweet.
Foxconn halted operations at its Shenzhen factories in early March after China’s tech hub in southern Guangdong province imposed a citywide lockdown to combat a wave of Omicron cases. Foxconn resumed some production in the city under a closed system, two days after shutting down operations there.
Foxconn established its first plant in Kunshan in 1993 as part of the company’s expansion into the Yangtze River Delta, a megalopolis encompassing areas of Shanghai, Jiangsu and the eastern coastal province of Zhejiang. Tens of thousands of workers are employed at Foxconn in Kunshan, where cumulative revenues since 1993 have reached about 290 billion yuan ($44.6 billion), according to a report by People’s Daily in 2020.
According to the same report, more than 5,300 Taiwanese companies — including Wistron Corp and Luxshare Precision Industry — contributed about 30 percent of Kunshan’s annual gross domestic product through 2020.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative language coverage of China and Asia in more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Facebook page Twitter Pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
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