Apple iPhone 14 Pro & Max Production Cuts: 6 Million Units Less in 2023 Amid China Factory Unrest
Apple faces a significant production drop of 6 million iPhones in 2023 at its Zhengzhou plant due to COVID-19 restrictions and worker protests, impacting global supply and prompting shifts in manufacturing strategies.
Apple Inc. is set to produce approximately 6 million fewer iPhone 14 Pro and Max units in 2023 as a result of ongoing disruptions at its major manufacturing facility in Zhengzhou, China. The plant has been severely affected by strict COVID-19 protocols and worker unrest sparked by pay disputes and safety concerns.
The Taiwanese company Foxconn, which operates the Zhengzhou factory, is working to resume normal operations and fill thousands of vacant positions caused by mass walkouts. However, the pace of recovery remains uncertain, with industry insiders estimating a significant impact on Apple's iPhone supply chain.
Key Highlights
- Apple’s iPhone 14 Pro and Max production expected to decline by 6 million units in 2023.
- Worker protests erupted due to COVID-19 lockdowns and perceived unsafe conditions at the Zhengzhou facility.
- Thousands of employees accepted offers of two months’ pay to quit, intensifying labor shortages.
According to Daniel Ives, Managing Director of Equity Research at Wedbush Securities, "Each week of disruption is estimated to cost Apple about $1 billion in lost iPhone sales, potentially reducing iPhone 14 sales by around 5%." This production setback underscores Apple's heavy reliance on China for manufacturing and may accelerate the company’s diversification efforts to countries like India.
The unrest follows widespread protests across China, including in Shanghai and Beijing, triggered by stringent COVID-19 lockdowns. These demonstrations represent the largest civil disobedience movement in China since 1989, reflecting growing public dissatisfaction with government policies.
The Zhengzhou plant, which employs over 200,000 workers, was locked down in October amid a COVID-19 outbreak. Many workers expressed concerns over health risks, with some describing the conditions as life-threatening. This led to mass walkouts despite initial incentives like quadrupled daily bonuses, which were not fully honored, fueling further protests.
The situation deescalated when Foxconn offered two months’ wages to employees choosing to resign, though the factory has not yet confirmed whether it has replenished its workforce or restored production levels.
Apple’s stock has declined by 20% over the past year, underperforming the Nasdaq Composite Index's 29% drop, reflecting investor concerns over supply chain stability and production challenges.
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