iPhone city is operating normally despite China Covid lockdowns

The world’s biggest iPhone assembly campus, on the outskirts of the central Chinese city of Zhengzhou, is operating normally despite lockdowns and mass Covid-19 testing in the area that began last week, the official Henan Daily reported.

A surge in Covid infections in Shanghai led to extensive disruptions there, and Zhengzhou’s decision late Friday to implement a quarantine raised concerns that Foxconn Technology Group’s facility may have to limit operations. The sprawling assembly site’s importance to Apple Inc.’s smartphone supply chain has earned the locality the nickname of iPhone City. Local authorities on Monday morning ordered a fresh round of mass testing.

“Production at the Foxconn campus is proceeding well with some 200,000 workers,” the newspaper said, citing Foxconn managers within the compound. The Taiwanese company is cooperating with local government and putting measures in place to ensure worker safety. “The supply lines haven’t been affected by Covid.”

President Xi Jinping has championed a zero-tolerance approach to Covid and his administration has held firm, even as public anger and economic costs mount.

“Prevention and control work cannot be relaxed,” Xi said during a trip to the island province of Hainan, the official Xinhua News Agency reported last week.

Many factories across China’s electronics manufacturing hubs of Shanghai, Kunshan and Suzhou have either halted operations completely or are only able to maintain partial production due to stringent restrictions on personnel movement and logistics.

Tesla Inc., iPhone assembler Pegatron Corp., Apple laptop maker Quanta Computer Inc. and many other electronics parts makers were forced to pause production, causing ripples of disruption beyond China’s borders. Japan’s Mazda Motor Corp. said last week it will suspend production at two domestic factories for a second time because of supply challenges caused by China’s virus outbreak.

Shanghai on Saturday unveiled plans to resume work in the city and said businesses should formulate plans for closed-loop management, where workers live on-site and are tested regularly. Quanta has resumed partial production in Shanghai, according to Xinhua. Tesla is also calling back its workers in the city to prepare for resumption of production as soon as this week, after a weeks-long suspension, Bloomberg News has reported.

On Monday, senior Chinese officials including Vice Premier Liu He highlighted the need to stabilize the supply chain in a meeting, according to a Xinhua report. They announced measures including creating white lists of manufacturers and foreign trade firms and leveraging 1 trillion yuan ($157 billion) to help resolve supply chain issues.