Foxconn Shuts Down Plants in Shenzhen due to a new COVID Outbreak
To remedy the problem, Foxconn's Shenzhen plant will be Temporarily Shut Down.
Shenzhen's authorities ordered a citywide lockdown on Sunday after 66 new COVID cases were reported that day, raising the total number of cases in the southern Chinese city to almost 400 since late February. The lockdown is expected to last a week, during which time health officials will test every person three times, according to officials.
Foxconn said in a statement to Fortune that it has "modified our production line to reduce the potential impact" of the Shenzhen shutdown, citing the company's "diversified production sites in China."
Aside from rerouting Apple's supply chain, the week-long siege in Shenzhen might cause severe disruptions in other tech firms' international supply chains. Shenzhen is a key trading hub between the United States and China, with some of the world's largest ports.
A couple of major consumer electronics manufacturers have been forced to close, most notably the factories that assemble Apple's products. According to Reuters, Foxconn and Unimicron have both declared shutdown as a result of additional limitations imposed following a COVID outbreak in Shenzhen. Officials are urging residents to stay indoors as much as possible and have started a mass-testing program to stop the virus from spreading. Foxconn and Unimicron will cease operations until further notice as a result of the suspension, with backup plans in place to deal with any delays.
While the delay is likely to be minor, it is yet another stumbling block in the consumer electronics industry's already bumpy route. After all, COVID has aided in the acceleration of a critical period for the computer industry, with chip supplies which were already scarce becoming increasingly scarce. And, as Reuters reported just a few days ago, the invasion of Ukraine will have a significant impact on the global supply of high-quality neon, which is used to build semiconductors. All of this means that new devices will be in much higher demand, and will be much more expensive, while all of this is going on.
