Foxconn Still Under COVID-19 Lockdown, Expects Revenue Shortfall

Foxconn revenue covid-19

Apple’s largest iPhone assembler continues to struggle from a COVID-19 outbreak that’s impacted its production capacity. The Foxconn campus in Zhengzhou, China remains in a closed-loop status. Furthermore, Foxconn recently warned analysts and investors its quarterly revenue will fall as a result.

COVID-19 Disruptions Continue to Plague Primary iPhone Assembly Plant

Foxconn’s facility in Zhengzhou employs more than 200,000 people and is the largest assembly plant for Apple’s iPhone product line. Since mid-October, the plant has been under a closed-loop COVID-19 lockdown. Despite several bonus offers, Foxconn’s plant has seen many employees leaving the facility, some even climbing fences to escape.

Company chairman Liu Young-way told South China Morning Post that Foxconn is trying to “ensure both employee health and safe production.” He also said that the plant is trying to “resume normal productivity as soon as possible.”

Unfortunately, the plant remains in its closed-loop state, which was originally scheduled to end Nov. 9. Several reports have indicated that Foxconn severely underreported the number of confirmed COVID-19 cases at the plant, which may be why the lockdown continues. The Zhengzhou city district itself announced Wednesday an end to a week-long lockdown, but that doesn’t include the Foxconn factory.

In fact, Zhengzhou city officials have labelled an area surrounding the 5.6-million-square-meter(60.28 square feet) factory as a “temporary control area to avoid spillover.” Recently, Apple announced shipping delays for iPhone 14 Pro models would continue, potentially affecting 1Q23 revenue.

Foxconn Announces Revenue Shortfall, Thanks to COVID-19 Lockdown

In its 3Q22 quarterly earnings statement on Thursday, the manufacturer reported net income of $1.2 billion, up 5%, with revenue up 24% to $55.45 billion. While these numbers represent growth for the company, it still missed its estimates for the third quarter.

Furthermore, Foxconn reported the impact of the COVID-19 disruptions in Zhengzhou would affect its 4Q22 revenue. On Monday, Foxconn said it anticipated revenue for the three months between October and December to be slightly down from a year prior.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.