Discontent with the strict procedures taken to stop the spread of COVID-19 at Foxconn's major Zhengzhou facility in central China, which employs over 200,000 people, has caused several employees to leave the site.
Foxconn, a supplier to Apple Inc., plans to revise its fourth-quarter outlook on Thursday after warning this week of the effects of COVID-19 limitations at a significant factory in Zhengzhou, China.
The lockdown was lifted on Wednesday, but Foxconn claimed it was keeping up "closed loop" operations, a bubble-like setup that is frequently implemented as part of virus protection efforts in China and involves isolating personnel from the outside world as they sleep, live, and work.
Foxconn stated on Monday that it was striving to restart full production there as soon as possible. The company also stated that it would "revise down" its outlook for the fourth quarter as a result of the events in Zhengzhou, albeit not providing any other information.
Foxconn will announce its third-quarter profits on Thursday at 7:00 GMT. According to Refinitiv, analysts anticipate a profit of $41.3 billion, up 11.7% year over year, as a result of the continued demand for high-end consumer electronics and data centers.
The company stated that in addition to providing an update on its outlook for the current quarter, it would also provide a numerical outlook. Instead, it would simply provide a broad forecast regarding the overall course of events. By the second part of November, Foxconn hopes to resume full production at its Zhengzhou plant, according to a source with knowledge of the situation.
Following a large production reduction at the virus-ravaged facility in China, Apple said on Monday that it expects lower shipments of high-end iPhone 14 models than originally planned, lowering its sales projection for the year's end holiday season. As they compete to produce smartphones, tablets, and other devices for the year-end Christmas season in Western markets, Taiwan's tech companies often have their busiest quarter in the fourth quarter.
The stock of Foxconn, formerly known as Hon Hai Precision Industry Co Ltd, rose 2.5% on Wednesday, outpacing the 2.2% increase in the overall market. The shares have decreased by 1.4% thus far this year.
Factory operations are typically in full swing to meet demand over the holiday season, so the disruptions occur at a crucial time of year for the consumer electronics sector. Foxconn's primary iPhone manufacturing site is located in the Zhengzhou Airport Economy Zone, and the local government has mandated a lockdown there from November 2 to Nov. 7.