Due to a resurgence of the Covid-19 infections, the southern manufacturing hub has been put on a high alert, shuttering public transport and factories, including Foxconn's two plants. But the firm said the impact on operation is limited as factories elsewhere step up to the plate
Foxconn (Foxconn Technology Group), one of Apple’s biggest contractors, has notified its two factories in Shenzhen to suspend operation to cooperate with local epidemic prevention work, according to Jiemian News, an online business news portal.
The notice stated that Foxconn’s industrial parks in southern China’s boomtown Shenzhen, in compliance with the local government’s Covid-19 prevention policies, will cease operation from March 14 and will not resume production until notified by the local government.
“Because our company has other backup factories, the company hs carried out necessary production deployment to reduce the impact on its operations,” a spokesperson of Foxconn Industrial Internet (601138.SH) said when answering questions from investors on the “Shanghai Stock Exchange e-Interaction” platform on March 14.
According to Shenzhen Municipal Health Commission, from 0:00 to 24:00 on March 13, 86 new Covid-19 cases were reported in the city , of which 75 were confirmed infections, and another 11 were asymptomatic carriers .
According to the official WeChat account of the local government, on March 13, the city's Coronavirus Epidemic Prevention and Control Headquarters requested that from March 14 to 20, non-urban security enterprises should stop operating and staff should work from home, and that the city should stop all non-essential activities. Buses and subways are out of service, and so-called “closed management,” meaning strict quarantine measures curbing mobility, is implemented in residential areas and industrial parks.
Foxconn website shows that Foxconn has two Science and Technology Parks (Longhua and Guanlan) in Shenzhen. The former was put into operation in June 1996 and functions as Foxconn's operation center and global manufacturing headquarters in mainland China. It is also Foxconn’s earliest factory in mainland China, Jiemian reported.
According to a Baidu Encyclopedia entry, Foxconn’s Longhua park covers an area of 2.3 square kilometers, while the Guanlan Park sits on a land parcel spanning 2.95 square kilometers. In addition to the factory buildings, the parks also boast living quarters such as staff apartments and restaurants. At its peak, the Longhua Park is home to more than 600,000 workers.
Jiemian reported that both the Longhua and Guanlan factories have production lines that mainly churn out mobile communication terminal equipment such as Apple’s iPhone and accessories for iPads and MacBook, among other products.
According to China Securities Journal, industry chain analysts believe the suspension of operations in the Shenzhen park is expected to have a limited impact on Foxconn's overall business. This is because Foxconn's factories in Zhengzhou, capital of central China’s Henan Province, and Chengdu, capital of southwestern China’s Sichuan Province, are the main manufacturing hubs for Apple, and the Zhengzhou factory is one of the largest iPhone assembly plants.