Foxconn has discontinued the supplier to Apple Inc. Its operations are at its Shenzhen locations, one of which produces iPhones, in response to a government-imposed shutdown of the tech hub.
The Taiwanese company, also known as Hon Hai Precision Industry Co., Ltd. Headquartered in China in the region and a major manufacturing site in Guanlan. The company said in a statement that it had halted operations at the two university campuses and reallocated production to other locations to reduce the impact of the disruption. Foxconn did not specify the length of the suspension. The measures taken by the Chinese government are calling for non-essential businesses in Shenzhen to stop until March 20.
While the shutdown could affect production of many devices made by Foxconn for Apple and other brands, demand for electronics typically declines in the first quarter of each year after the peak of the holiday season.
Hon Hai shares fell 1% Monday morning in Taipei.
Foxconn, Apple’s major smartphone assembler, does most of its production at a factory in Zhengzhou, central China, earning it the nickname iPhone City. Its location in Guanlan is smaller in size. The company was among the first to face disruptions from the coronavirus outbreak two years ago when it asked employees to move away from its Shenzhen headquarters as a precaution.
China placed 17.5 million Shenzhen residents in quarantine for at least a week on Sunday, in an effort to stem the growing Covid-19 outbreak. The shutdown came after virus cases across the country doubled to nearly 3,400, and will be accompanied by three rounds of citywide mass testing, according to a government notice. The move came on the heels of previous restrictions imposed on Shenzhen’s central business district.
All bus and subway systems have been closed, and businesses except for those providing essential services have been closed. Shenzhen is home to the headquarters of the giant Huawei Technologies Co. and SZ DJI Technology Co. and Tencent Holdings Ltd. As well as one of the busiest ports in China.