Foxconn unrest risks iPhone shipments, weighs on Apple shares
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Foxconn unrest risks iPhone shipments, weighs on Apple shares

Foxconn unrest risks iPhone shipments, weighs on Apple shares

On Friday, a source with knowledge of the situation told CNBC that the latest round of worker unrest at Foxconn’s (2317.TW) flagship iPhone plant in China has resulted in the departure of thousands of workers and will likely lead to a further reduction in November shipments.

Foxconn unrest risks iPhone shipments, weighs on Apple shares

Foxconn unrest risks iPhone shipments, weighs on Apple shares

Because of the strict COVID-19 restrictions, the world’s largest Apple (AAPL.O) iPhone factory has been dealing with worker discontent and a halt in production in the run-up to the holiday season and the Lunar New Year in early January. Many employees have been isolated or have simply left the plant.

Foxconn may have more than 30% of the site’s November production affected, up from an internal estimate of up to 30% when the labour issues erupted in late October, the source said, due to the escalation on Wednesday, which saw workers clash with security personnel.

The insider said that it is doubtful that the facility would return to full production by the end of the month, despite the fact that it is the only one that produces luxury iPhone models like the iPhone 14 Pro.

Formerly known as Hon Hai Precision Industry Co and now simply called Foxconn, the company declined to provide any additional information. Although the company claimed to have workers on site on Thursday, Apple did not respond to a request for comment made on Friday.

Concerns over Apple’s ability to deliver products for the busy holiday period have been exacerbated by reports that worker unrest at Foxconn’s plant in China could weigh on Apple’s November iPhone shipments. This was reported by Victoria Scholar, head of investment at Interactive Investor.

Late in Friday’s morning trading, Apple shares were down 1.9%, while the Nasdaq composite index was down 0.3%.

“The stock of Apple continues to be considered among the most stable in the technology industry. Because of the widespread unpredictability in the economy, Apple has yet to issue any official guidance “Professional academic inserted.

On Tuesday, the U.S.’s Best Buy Co Inc (BBY.N) warned that premium iPhone models would be hard to come by during the upcoming holiday shopping season. Reuters reported this week that analysts said sales of iPhones at Apple stores in the United States during Black Friday shopping season were down from a year earlier and that it was taking longer to replenish stocks.

FREIGHT DECREASES

Christine Wang, an analyst at KGI Securities, predicted a 12% drop in iPhone shipments for the fourth quarter of 2022 if the current issue persists through December. This would equate to a loss of around 10 million units of iPhone production.

As the holiday shopping season approaches, Wedbush Securities reports that many Apple stores now have 25% to 30% fewer iPhone 14 Pros than usual.
Apple released a statement on November 7 saying it was expecting lower-than-anticipated sales of the iPhone 14 Pro and iPhone 14 Pro Max.

Foxconn has come under fire in recent weeks from a number of its newly hired workers who have complained of being misled by the company about the benefits package they will receive at the factory and who have also voiced concerns about having to share dorms with coworkers who have

Foxconn admitted on Thursday that it had made a “technical error” in its hiring practices, and it offered to pay new hires who resigned and left the company $10,000 yuan ($1,400).

According to the source, over 20,000 employees cashed out, most of whom were recent hires who had not yet begun working on production lines. Online videos from China on Friday showed workers waiting in long lines with their luggage to board buses.

In other words, “it’s time to go home,” as one user put it.

Before the problems started, the facility had a workforce of over 200 thousand people. Its massive 1.4 million square metre (15 million square foot) complex includes dorms, dining halls, basketball courts, and a football field.

An additional Foxconn insider confirmed that some new employees had left the premises, but declined to provide specific numbers. According to this person, the departures would not affect ongoing production because the departing employees had not yet been trained or had not started working.

“The incident has had a significant effect on our public profile but has had only a minor effect on our actual capacity. What we can do now won’t change, “This is what the source claimed.

“A corporation can only do so much to prevent pandemics. The issue has persisted for some time. Every person on Earth has to deal with this issue, “the source said, citing the May upheaval at another Apple supplier, Quanta (2382.TW), as an example of worker unrest sparked by stringent COVID restrictions.

Foxconn’s stock price dropped 0.5% at the market’s close, underperforming the.TWII index which closed unchanged.

 

 

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Foxconn unrest risks iPhone shipments, weighs on Apple shares
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