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Tag: Foxconn

  • Workers flee China’s biggest iPhone factory over Covid outbreak | CNN Business

    Workers flee China’s biggest iPhone factory over Covid outbreak | CNN Business

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    New Delhi
    CNN Business
     — 

    Foxconn, one of Apple’s largest suppliers, is wrestling with major disruption at its biggest iPhone assembly factory in China, as anxious workers reportedly flee the locked-down facility, according to social media videos.

    The Taiwanese company is racing to control a Covid outbreak at its campus in the central Chinese city of Zhengzhou.

    The exodus is putting a tremendous strain on Foxconn just before the key holiday shopping season begins and highlights how the country’s stringent zero-Covid policy is hurting international business.

    “[We] fully understand your eagerness to go back home,” Foxconn told its employees over the weekend, according to a post on Zhengzhou government’s official WeChat account.

    “For employees who voluntarily stay in the company’s factory area, the port government and the company will jointly ensure everyone’s…health and safety,” it added.

    Analysts said the chaos at Zhengzhou could jeopardize Apple and Foxconn’s output in the coming weeks. Ivan Lam, senior research analyst at Counterpoint, estimated that between 10% and 30% of iPhone 14 production could be affected in the near term if the situation did not stabilize.

    The Zhengzhou campus is the world’s biggest iPhone factory and typically accounts for as much as 85% of iPhone assembly capacity, according to Lam’s estimates.

    A Foxconn spokesperson told Chinese state media that the company is trying to boost production at other sites.

    “At present, because now is the peak production season… [there is] a large demand for workers,” a Foxconn spokesperson told Henan Daily on Monday, adding that the company was “also coordinating back-up production capacity at other sites.”

    Foxconn and Apple did not respond to a request for comment from CNN.

    Shares in Foxconn, also known as Hon Hai Precision Industry, fell 2.6% on Tuesday.

    Videos of many people leaving Zhengzhou on foot have gone viral on Chinese social media in recent days. The city, which has a population of more than 12 million, imposed sweeping lockdown measures earlier last month after identifying dozens of Covid-19 cases.

    State media has said that many Foxconn workers are among those walking miles to escape the city. Calling it a “helpless move for some employees,” a Foxconn manager told media outlet Yicai that workers are panicking over the spread of the virus at the factory and lack of access to official information.

    Foxconn said it was organizing vehicles for employees wishing to return home, according to a post on Zhengzhou government’s official WeChat account over the weekend.

    The company has also quadrupled daily bonuses for workers at the plant this month, it said in a post on its official WeChat account on Tuesday.

    While these disruptions will impact iPhone production in the near term, analysts say it may not dent Apple’s iPhone shipments in the key holiday season.

    “I think in one to two weeks, things will get back to normal, given the current status,” Lam said.

    “They still have a lot of alternative production sites,” he said, adding that Foxconn had already begun shifting production to other facilities in China, such as in the southern province of Guangdong. “Things are under control now.”

    And, as Beijing shows few signs of moving away from its rigid Covid policies, Apple has started to boost production in other countries, including India, to reduce its dependence on China.

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  • Hospitalizations on the rise in New York City as new COVID strains spread rapidly

    Hospitalizations on the rise in New York City as new COVID strains spread rapidly

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    Hospitalizations are rising again in New York City with the spread of new COVID-19 subvariants that are better at evading immunity. Cases of flu and respiratory syncytial virus, or RSV, are also increasing.

    State data show about 1,100 patients hospitalized with COVID as of Oct. 24, up from 750 in mid-September, as the New York Times reported. Case numbers have held steady, although with many people testing at home where data are not being collected, those numbers are not reliable.

    Data from the Centers for Disease Control and Prevention show that the omicron sublineages named BQ.1 and BQ.1.1 accounted for 42.5% of all cases in the New York region in the week through Oct. 29, up from 37% the previous week.

    That was more than the BA.5 omicron subvariant, which accounted for 35.7% of new cases in the New York region in the latest week. The two sublineages were not even registering as recently as three weeks ago, demonstrating just how fast they are spreading.

    Experts are also concerned about a nationwide surge in RSV, which can cause breathing difficulties in small children and older adults and for which there is currently no vaccine.

    There was good news from Pfizer Inc., however, which said Tuesday that data from a late-stage trial of an RSV vaccine had proved effective in preventing severe illness in children up to 6 months old.

    The Phase 3 trial found that the vaccine, given to pregnant mothers, achieved vaccine efficacy of 81.8% in infants from birth through the first 90 days of life. The trial found efficacy of 69.4% through the first 6 months of life.

    Pfizer
    PFE,
    +3.14%
    said it expects to make its first U.S. regulatory application for the vaccine by the end of 2022 and to follow on with other regulatory bodies. It will also submit the results of the trial for peer review in a scientific journal.

    The daily U.S. average for new COVID cases stood at 37,665 on Monday, according to a New York Times tracker, which was flat as compared with two weeks ago. The daily average for hospitalizations was up 2% to 27,184, while the daily average for deaths was down 3% to 348. 

    Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

    Other COVID-19 news you should know about:

    • Apple 
    AAPL,
    -1.75%
    supplier Foxconn
    2317,

    said Tuesday it has quadrupled bonuses for workers at its Zhengzhou plant in central China as it seeks to quell discontent over COVID restrictions and retain staff at the giant iPhone manufacturing site, Reuters reported. Daily bonuses for employees, who are part of a Foxconn unit responsible for making electronics including smartphones, have been raised to 400 yuan ($55) a day for November from 100 yuan, according to the official WeChat account of Foxconn’s Zhengzhou plant. The move comes after workers fled the site over the weekend to avoid COVID curbs after complaining about their treatment and provisions via social media.

    Workers at the world’s biggest assembly site for Apple’s iPhones walked out as Foxconn has struggled to contain a COVID-19 outbreak. The chaos highlights the tension between Beijing’s rigid pandemic controls and the urge to keep production on track. Photo: Hangpai Xinyang/Associated Press

    • The Wall Street Journal reported Tuesday that Hong Kong stocks appeared to be rallying after an anonymous post on Chinese social media suggested that the government may intend to soften pandemic-related restrictions beginning in March. Other outlets also reported on the rumor. American depositary receipts for Chinese companies surged on the news.

    See: Alibaba and Nio among Chinese stocks surging as hopes build about potential reopening

    • Pfizer’s COVID antiviral Paxlovid brought in $7.5 billion in sales in the third quarter of the year, compared with a FactSet consensus of $7.6 billion. The drug company also reiterated guidance for Paxlovid revenues in 2022, saying it still expects $22 billion in sales for the year. The FactSet consensus is $22.5 billion. Pfizer raised its full-year revenue guidance for the company’s Comirnaty COVID vaccine by $2 billion to $34 billion. The guidance includes doses expected to be delivered in fiscal 2022, primarily under contracts signed as of mid-October.

    • AstraZeneca PLC’s
    AZN,
    +1.77%

    AZN,
    +0.90%
    COVID vaccine Vaxzevria has been granted full marketing authorization in the European Union, Dow Jones Newswires reported. The Anglo-Swedish pharmaceutical giant said Vaxzevria has been shown to be effective against all forms of the virus. Vaxzevria was originally granted conditional marketing authorization due to the urgency of the COVID-19 pandemic, it said.

    Here’s what the numbers say:

    The global tally of confirmed cases of COVID-19 topped 630.6 million on Monday, while the death toll rose above 6.59 million, according to data aggregated by Johns Hopkins University.

    The U.S. leads the world with 97.5 million cases and 1,070,429 fatalities.

    The Centers for Disease Control and Prevention’s tracker shows that 226.9 million people living in the U.S., equal to 68.4% of the total population, are fully vaccinated, meaning they have had their primary shots.

    So far, just 22.8 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 7.3% of the overall population.

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  • Foxconn COVID woes may hit up to 30% of iPhone Nov shipments from Zhengzhou plant 

    Foxconn COVID woes may hit up to 30% of iPhone Nov shipments from Zhengzhou plant 

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    Apple supplier Foxconn’s COVID-19 woes at its vast iPhone manufacturing facility in China’s Zhengzhou city could slash the site’s November iPhone shipments by up to 30%, a source with direct knowledge of the matter said.

    The source, who declined to be identified as the information was private, said Foxconn is working to boost iPhone production at its factory in the southern city of Shenzhen.

    Foxconn referred Reuters to a statement it released late on Sunday, in which the company said that the situation was gradually being brought under control and that Foxconn would coordinate back-up production capacity with its other plants to reduce any potential impact. 

    Apple did not immediately respond to a request from Reuters for comment. Shares of Foxconn, formally called Hon Hai Precision Industry Co Ltd, dropped 1.9% on Monday morning, compared to a 1.1% rise in the broader market.

    Foxconn’s factory in Zhengzhou assembles the majority of the company’s global iPhone output, though Apple also produces the product in southern China as well as in India.

    The plant, which employs about 200,000 workers, has in recent days been rocked by worker discontent over stringent measures to curb COVID-19 within the site.

    Several migrant workers fled the plant over the weekend for their hometowns, driving cities to hastily draw up plans to accommodate them. 

    The impact on production comes amid the traditionally busy time for electronics makers and ahead of the year-end holiday season, which is also a prime time for vendors such as Apple.

    Under China’s ultra-strict zero-COVID policies, localities are mandated to act swiftly to quell any outbreaks, with measures that could include full-scale lockdowns. On Oct. 19, Foxconn banned all dining-in at canteens and required workers to take their meals in their dormitories, but said that production was normal.

    Photographs and videos circulating widely on Chinese social media since Saturday showed Foxconn workers trekking across fields in the day and along roads at night. Reuters could not immediately verify the authenticity of the posts.

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  • Foxconn pulls out of $19 billion chipmaking project in India | CNN Business

    Foxconn pulls out of $19 billion chipmaking project in India | CNN Business

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    Hong Kong
    CNN
     — 

    Foxconn says it is exiting an ambitious project to help build one of India’s first chip factories.

    The world’s largest contract electronics maker will “no longer move forward” with its $19.4 billion joint venture with Vedanta

    (VEDL)    , an Indian metals and energy conglomerate, in Asia’s third largest economy, it said Monday.

    The news was seen as a blow to the Indian government’s plans to turn the country into a tech manufacturing powerhouse, even as officials have sought to counter that view.

    In a statement to CNN, Foxconn, a Taiwanese tech giant best known for being one of Apple

    (AAPL)    ’s top suppliers, said the decision was based on “mutual agreement” and allowed the company “to explore more diverse development opportunities.”

    The joint venture will now be wholly owned by Vedanta.

    In a followup statement Tuesday, Foxconn reaffirmed its commitment to invest in Indian chipmaking, saying it will apply for a government program that subsidizes the cost of setting up semiconductor or electronic display production facilities in the country.

    “Building fabs from scratch in a new geography is a challenge, but Foxconn is committed to invest in India,” the company said, referring to fabrication plants, the technical term for semiconductor factories.

    “There was recognition from both sides that the project was not moving fast enough, there were challenging gaps we were not able to smoothly overcome, as well as external issues unrelated to the project,” it said.

    Since announcing the deal in February 2022, Foxconn said it had worked with Vedanta on plans to set up a semiconductor plant in the country that would support a wider ecosystem for manufacturers.

    It did not provide an investment figure for the facility, but Indian Prime Minister Narendra Modi tweeted in September that the total investment would amount to 1.54 trillion rupees, which was then equivalent to $19.4 billion.

    Foxconn said last year it was actively scouting for locations for the plant and held discussions with “a few state governments.”

    Foxconn CEO Young Liu has in recent months courted Indian partners, having traveled there in February to seek new collaborators.

    The company, which already has factories in the Indian states of Andhra Pradesh and Tamil Nadu, is one of many global tech firms looking for opportunities in the country, particularly as multinationals seek to diversify their supply chains beyond China.

    On Monday, India’s electronics and information technology minister Ashwini Vaishnaw told Indian news outlet and CNN affiliate News18 that both Vedanta and Foxconn are “completely committed to India’s semiconductor mission.”

    Rajeev Chandrasekhar, the country’s minister of state for electronics and IT, also tweeted that the news “changes nothing about” India’s semiconductor manufacturing goals, adding that the decision would still allow “both companies to independently pursue their strategies” in India.

    The project had been hailed as a milestone in India’s campaign to attract more investment in manufacturing, a sector sorely needed to help ease unemployment.

    Prime Minister Modi had framed the project as a significant boost for the economy and jobs.

    Foxconn shares rose 1.3% in Taipei on Tuesday following its announcement, while Vedanta’s shares fell 1.4% in Mumbai. The latter has not responded to a request for comment.

    Other prominent tech companies have moved to expand production in India recently.

    Last month, US chipmaker Micron

    (MICR)     announced a new factory in the western state of Gujarat, calling it the country’s first semiconductor assembly and test manufacturing facility.

    The venture will see Micron invest up to $825 million, and create “up to 5,000 new direct Micron jobs and 15,000 community jobs over the next several years,” according to the company.

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