Sunday, September 19, 2021

Flooding in China’s ‘iPhone City’ could delay production

TAIPEI – As residents of Zhengzhou wonder if the death toll from record rain in China’s Henan province will exceed the latest tally of 58 deaths, officials estimated the province had caused $10 billion (65.5 billion) in economic damage to the manufacturing hub. billion yuan).

The torrential rains that have been pouring in for the past one week have flooded the state. As a result, supply chains have been disrupted for many factories in the area, including a campus in Zhengzhou where nearly half of Apple’s iPhones sold worldwide are produced. That’s why Zhengzhou is sometimes referred to as the “iPhone City”.

Hon High Technology Group, a Taiwanese multinational electronics contract manufacturer known as Foxconn, operates the Zhengzhou campus. Nikkei Asia told Foxconn chairman Young Liu told the company’s annual shareholders meeting in Taiwan that the flood had limited impact on the campus.

A source familiar with Hon High Technology Group, who was not authorized to speak to the press, told VOA Mandarin that one of the group’s three plants in Zhengzhou had been flooded. The flooded plant produced PC connectors, not mobile phones, according to a VOA Mandarin source, who said production of the iPhone was unlikely to be disrupted as no machinery was damaged and Foxconn kept a full stock of necessary materials and parts Is.

FILE – A man sits on a vehicle stuck on a flooded road following heavy rainfall in Zhengzhou, Henan province, China July 22, 2021.

According to multiple press reports tracking the company, Apple is scheduled to release the iPhone 13 in September. But as long as transport resumes soon, the new iPhone 13 won’t be delayed, the source said.

However, the scope of the devastation could delay transit clean-up, and one analyst told VOA Mandarin that production of the iPhone 13 depends on whether local transport recovers quickly.

trip interrupted

Qiu Shi-Fang, senior analyst at the Taiwan Institute of Economic Research, told VOA Mandarin that iPhone components are typically shipped to the assembly plant in July and the first batch of iPhones is finished in August. It added that the arrival of components will affect subsequent shipments of new phones.

However, roads have been turned into rivers, and flights and trains have also been suspended in many parts of Henan, creating uncertainty about iPhone production.

Foxconn’s Zhengzhou plants have more than 90 production lines with approximately 350,000 workers. Qiu said Foxconn is facing difficulties in hiring workers from outside Zhengzhou due to transit jams related to the floods.

Qiu said that if Zhengzhou fails to return to normalcy by the end of July, production of the iPhone 13 could be delayed.

Thousands of cars have also been damaged in the floods in Henan province. Multiple reports from the local car insurance industry suggest that the flood damaged 30,000 to 80,000 cars, which could cost insurance companies more than $154 million (1 billion yuan) in compensation.

Across Henan province, 11 insurance companies had received claims for nearly 32,000 damaged cars as of Thursday, according to Reuters.

Zhengzhou, a traditional automotive industry center, produces about 500,000 vehicles annually, about 3% of China’s output from large manufacturers such as Yutong Bus, Haima Motor and Zhengzhou Nissan.

Agriculture in Henan was also badly affected by the rain. 200,000 hectares of farmland under water, according to Reuters.

Adriana Zhang contributed to this report.

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Flooding in China's 'iPhone City' could delay production
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