The chaos at Foxconn’s Zhengzhou, China plant is expected to hit Apple’s (NASDAQ:AAPL) iPhone November shipments by over 30%, up from the previous estimate of up to 30%, as per a Reuters report that cited a person with direct knowledge of the matter. Production at Foxconn, which contributes about 70% of iPhone’s global shipments, is getting impacted by the departure of additional workers at the Zhengzhou plant.
The Zhengzhou Foxconn plant, which was already facing COVID-related disruptions, was further hurt by violent protests by workers on Wednesday due to delayed bonus payments. Employees had earlier expressed their disappointment over the working conditions at the plant amid stringent COVID restrictions.
Foxconn on Thursday offered 10,000 yuan ($1,400) to its disgruntled workers, mostly new hires, to leave the company. Over 20,000 workers are estimated to have taken the money and left the plant. Foxconn previously expected the Zhengzhou factory to resume full production by the end of November. However, as per Reuters’ source, this goal might not be met.
The impact of Foxconn on Apple’s sales reinforces the need for the tech giant to diversify its supply chain. The disruption at Foxconn could significantly impact Apple’s sales in the crucial holiday quarter.
What is the Forecast for Apple Stock?
The Strong Buy consensus rating for Apple stock is based on 24 Buys and four Holds. The average AAPL stock price target of $180.48 suggests 19.5% upside potential. Shares have declined nearly 15% year-to-date.