Foxconn iPhone 12 output has taken a strong hit due to the intense COVID-19 second wave in India. Reuters reports that smartphone production has dropped by more than 50% at the manufacturer’s factory in the southern state of Tamil Nadu after 100 employees have tested positive for coronavirus.
As the cases continue to surge in the state, Indian officials have imposed a complete lockdown from Monday including the closure of shops, public transport, and other public places. As per sources familiar with the matter, Foxconn has enforced a no-entry ban at its Chennai factory until the end of May which has reduced its production capacity by half.
Foxconn bans employees from re-entering facilities after COVID-19 cases are reported
In a statement given to Reuters, the company addressed the rising COVID-19 cases and its operations in India said that:
“Foxconn places the health and safety of our employees as our highest priority and that is why we have been working closely with local government and public health authorities in India to address the challenges that we and all companies are facing in dealing with the COVID-19 crisis.”
The company further added that it providing support and medical assistance to the small number of workers who have tested positive for COVID-19. But sources report that the manufacturer has closed its facilities.
“Employees are only allowed to leave but not to enter the facility since yesterday,” the person said. “Only a small part of output is being kept.”
In 2020, Apple was reported to invest $1 billion in Foxconn to establish assembly units in India, the country is considered the world’s 2nd biggest economy and also a hub for cheap labor. But the outbreak of the COVID-19 pandemic casts a shadow of uncertainty over expansion plans.
However, the outlook has been dimmed by the coronavirus crisis engulfing India, where COVID-19 cases and deaths have surged at a record pace in recent weeks. The country has recorded around 22.66 million infections and more than 246,000 deaths, with experts saying the true figures could be far higher.
Foxconn’s shares fell as much as 6.2% after the Reuters report. The stock closed down 5.31%, outpacing a 3.8% fall in the broader market (.TWII) on concerns about rising COVID-19 cases in Taiwan.
As per the report, Nokia and OPPO suspended production at their Indian facilities due to coronavirus cases, last year.