Tech

Apple’s Biggest iPhone Production Site Hit By Flooding in Central China

TAIPEI—The severe flooding in central China cut power temporarily at Apple Inc.’s biggest iPhone manufacturing site as water seeped into some areas and the site’s operator gave many workers time off, said factory employees there.

The damage to the manufacturing hub in Zhengzhou city, Henan province, however, appeared limited, the workers said. Taiwan-based Foxconn Technology Group operates three factories in the city with hundreds of thousands of workers—many of them living on factory campuses—producing more than half the world’s iPhones, according to analysts.

Foxconn said that it has implemented an emergency response plan for flood control but there had been no direct impact to its facilities from the flooding.

The potential disruption to production arrives just as Apple suppliers start to gear up for this year’s new iPhone models, expected to be launched in the fall. Assembly of the new models and their components generally starts around July and ramps up in the following weeks.

Record rainfall in central China triggered flooding that swamped subways and forced about 100,000 people to relocate. Henan province is a major base for industry and home to one of the world’s biggest iPhone-manufacturing sites. Photo: Agence France-Presse/Getty Images

Henan officials said Wednesday that at least 25 people have died and more than 1.2 million have been impacted by the flood, which started with heavy rains on Saturday. Local news and social media showed passengers stuck on subway cars in waist-deep water and vehicles submerged in flooded streets. Trains and flights were canceled, while many sections of highways in the region were closed.

Foxconn, also known as Hon Hai Precision Industry Co., said its employees in Zhengzhou are safe. Apple didn’t immediately respond to a request for comment.

“Our thoughts are with everyone affected by the flooding across Henan province, and the first responders helping people to safety,” chief executive Tim Cook said on his Weibo account, a Chinese social media platform similar to Twitter.

Apple will also be donating to flood relief efforts, Mr. Cook added, without specifying an amount.

Foxconn workers from the iPhone division at a factory in Zhengzhou, China, in 2017.



Photo:

Adam Dean for The Wall Street Journal

Foxconn will donate 100 million yuan, or around $15.5 million, a unit of the company said Wednesday.

According to local Foxconn employees, all three Foxconn factories in the city experienced hours of power outages Tuesday evening as the city went through a blackout due to the heavy rain.

Water reached Foxconn’s campus on Tuesday, and an assembly worker at one of the plants said he was submerged up to his thighs at the peak of the flooding. With the water level rising quickly on Tuesday night, some workers moved production equipment and inventories to prevent them from getting wet, he said. Still, they weren’t aware of serious damages, the people said.

It wasn’t clear whether the water had reached any of the assembly lines.

On Wednesday, Foxconn allowed most employees to take time off or work from home, while some assembly lines were still running, they said. The company told employees the exact time for returning to the factory would depend on the situation. As of Wednesday afternoon, they hadn’t received any instructions.

Taipei-based Isaiah Research forecasts that Apple will produce 130-140 million iPhones in the second half of the year, about 8% more than the same period last year. Of those, 80-85 million will be the latest iPhone 13 model, the technology research firm estimates.

Apple is set to report its third-quarter earnings on July 27. Foxconn will report its April-June results on Aug 12.

Write to Stephanie Yang at [email protected]

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