Production of the Apple iPhone 12 at a Foxconn factory in India has declined by more than 50 percent because workers infected with COVID-19 were forced to leave their posts, two sources told Reuters.
The Foxconn plant in the southern state of Tamil Nadu produces iPhone devices specifically for India, the world’s second largest smartphone market.
Tamil Nadu is one of the hardest hit states in the second coronavirus wave to hit India. Officials imposed a complete lockdown on the state starting Monday by shutting down public transportation and shuttering shops in an attempt to try slowly-rising infections.
More than 100 Foxconn employees in the state have tested positive for COVID-19, and the company has banned entry to its factory in the capital Chennai until the end of May, one of the sources said.
“Employees have only been allowed to leave the facility since yesterday, but not enter it,” said the person. “Only a small part of the output is retained.”
Both sources said more than 50 percent of the plant’s capacity had been cut and declined to be named as they did not have the authority to speak to the media.
They did not disclose the capacity of the plant and it was unclear how many workers were in the facility that provides dormitories for employees.
Taipei-based Foxconn, the world’s largest contract electronics manufacturer and a key supplier to Apple, said a small number of employees at one of its plants in India had tested positive for COVID-19 and the company had provided support, including medical assistance.
“Foxconn attaches great importance to the health and safety of our employees. That is why we have worked closely with local government and health authorities in India to address the challenges we and all companies are facing in dealing with the COVID-19 crisis,” it said in a statement to Reuters.
Foxconn declined to comment on plant performance or specific workforce. Apple did not immediately respond to a request for comment.
The shares of Foxconn even fell 6.2 percent according to the Reuters report. The stock closed 5.31 percent, beating the broader market’s 3.8 percent decline on concerns over rising COVID-19 cases in Taiwan.
India has benefited from Apple’s attempt to move some manufacturing operations from China to other markets while waging a trade war between Washington and Beijing. Apple announced in March that it had started assembling the iPhone 12 in India.
While Apple’s share of the budget, phone-dominated Indian market is small, CEO Tim Cook said in January that India’s business doubled year over year in the December quarter, helped by the launch of an online store.
Foxconn also said that strong smartphone sales contributed to a stronger-than-expected fourth-quarter performance in the work-from-home trend.
Research firm Canalys said India’s growth continued in the first quarter, with Apple shipping more than a million iPhone devices. Demand for the iPhone 12 was supported by local gatherings and attractive financing offers, Canalys said.
However, the outlook has been clouded by the coronavirus crisis in India, where COVID-19 cases and deaths have increased at a record pace in recent weeks. The country has recorded around 22.66 million infections and more than 246,000 deaths. Experts say the actual numbers could be far higher.
Foxconn is not the only manufacturer affected. Nokia and Chinese smartphone maker OPPO stopped manufacturing factories in India last year after employees tested positive for COVID-19.
Taipei-based technology research firm TrendForce cut its forecast for global smartphone production growth from 9.4 percent to 8.5 percent on Monday, citing the impact of the coronavirus in India on major vendors like Samsung and Apple.
“As a result, smartphone brands are expected to closely monitor their inventory levels of entire devices and adjust their subsequent production plans accordingly,” TrendForce said in a report, adding that the forecast could be lowered even further if the outbreak continues local Production and local sales in the second hits quarter.
© Thomson Reuters 2021
(This story was not edited by NDTV staff and is automatically generated from a syndicated feed.)