China restricts iPhone assembler Foxconn amid fresh COVID-19 outbreaks

Apple’s largest iPhone assembler, Foxconn, was forced to operate in a restricted ‘closed-loop’ system for seven days amid fresh Covid-19 outbreaks in Shenzhen, Bloomberg reports.

The local government has instructed its top 100 companies, including Huawei Technologies Co. and ZTE Corp., to restrict operations only to employees living in close quarters.

Authorities have also asked companies to reduce unnecessary interactions between non-manufacturing staff and factories to reduce the spread of infections.

A Foxconn spokesperson said operations at its Shenzhen locations “remained normal”. Its factory in Zhengzhou, central China, is a much larger iPhone manufacturing hub.

The measure in Shenzhen revives the possibility of Shanghai-style lockdowns that have forced tens of thousands of workers into solitary confinement. Supplier Apple Quanta Computer Inc., chipmaker Semiconductor Manufacturing International Corp. and Tesla Inc. were among the companies that operated their Shanghai factories in a closed loop for weeks or months.

Shenzhen reported 21 cases on Saturday, down from 19 a day ago, according to health authorities.

The latest restrictions come just months before Foxconn delivers the next generation of Apple’s iPhone lineup.

Earlier this year, Apple predicted that supply constraints would cost between $4 billion and $8 billion in revenue.

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