Foxconn shut down its two factories located in the city of Kunshan in the coastal Jiangsu province. Kunshan officials said all operations at the Foxconn plants have reportedly been put on hold since April 20 after workers tested positive for COVID-19. They added that the tens of thousands of Foxconn workers staying in dormitories have been put under strict lockdown rules.
Workers at the Foxconn facilities in Kunshan were also taken by surprise by the shutdown as they were hoping that Foxconn's closed-loop system – with employees being shuttled from their dormitories to the factory and back – would enable continued operations. The system was instrumental in Kunshan authorities granting the Taiwanese firm permission to resume manufacturing, alongside 60 other companies.
The city is home to 2.1 million residents and located 32 miles east of Shanghai, which is currently locked down due to China's zero-COVID policy. It is also home to many factories run by several Taiwanese electronic firms like Foxconn, whose factories are located in Dianfa and Fuhong at the northern part of the city. Two days after the shutdown of the Dianfa and Fuhong plants, Kunshan reported 23 new COVID-19 cases on April 22 – a leap from single-digit counts the week prior. (Related: SUPPLY CHAIN NIGHTMARE: Taiwanese manufacturers operating in Shanghai forced to shut down operations due to China's lockdown.)
First established in 1993, Foxconn's Kushan facilities have generated about $44.6 billion in revenue.
The shutdown of the Kushan factories also dealt a heavy blow to Apple's supply chain. The Big Tech giant helmed by Tim Cook had been depending on Foxconn to make up for its supply of mobile devices such as iPhones and iPads. Apple's supply chain problem stemmed from most of its key electronics suppliers, such as Pegatron and Compal Electronics, suspending operations due to COVID-19 lockdowns.
Aside from the two Kunshan factories, Foxconn also runs two factories in the southeastern Guangdong province – one in the city of Dongguan and another in Shenzhen, dubbed the Silicon Valley of China.
Foxconn managed to continue operations in its "Foxconn City" campus in Shenzhen two days after it initially shut down by following the closed-loop system, thereby isolating its workers from the outside. Employees were shuttled back and forth between the company-owned worker dormitories to the factory in order to avoid contact with non-workers. The company also provided regular COVID-19 tests to its workers. The closed loop system was later deployed to the Dongguan facility.
The company's acting spokesman Jimmy Huang confirmed to Al Jazeera on April 25 that manufacturing operations are proceeding as usual in the Shenzhen factory. A subsequent statement from the firm said that production has been shifted to other Foxconn facilities to address its weakened supply chains.
"As production has previously been deployed to backup factories, [Foxconn's] main products are located in overseas shipping [warehouses] and inventory levels are still sufficient; [thus], the impact on the company's business is limited," said the statement.
The forced shutdowns in factories owned by Foxconn and other technology firms came as the Chinese Communist Party adopted a zero-COVID policy across the country. The policy involved the imposition of stringent quarantine measures, including lockdowns, on areas with high COVID-19 cases. Millions of residents in the eastern part of China had been confined to their homes since the new wave spurred by the more infectious yet milder B11529 omicron variant hit in March. Omicron has caused the daily COVID-19 caseload to go beyond the 20,000 mark.
Following the central government in Beijing's declaration of a zero-COVID policy in March, Shenzen quarantined its 17.5 million residents. Southern Guangdong followed suit, imposing a citywide lockdown during the same month.
SupplyChainWarning.com has more stories about how China's zero-COVID policy impacts supply chains.
Watch a Shenzhen factory worker complaining that the lockdowns prevented him from putting food on the table below.
This video is from the Chinese taking down EVIL CCP channel on Brighteon.com.