'Foxconn Locked Down at iPhone Base in China... Korean Companies "Watching Closely"'

Panel and Camera Module Parts Suppliers Affected
"Still a 'Rumor'" Some Companies Show Caution

On the 29th of last month (local time), workers at the Foxconn factory in Zhengzhou, Henan Province, China, were seen leaving the factory carrying their belongings. (Image source=AP Yonhap News)

[Asia Economy Reporter Moon Chaeseok] The Chinese government temporarily shut down the world's largest Apple iPhone manufacturing plant to prevent the spread of COVID-19, prompting workers to attempt escapes and raising concerns about potential fallout for Korean companies. Major domestic firms supplying Apple say there is no immediate significant impact but are closely monitoring the situation.

According to the industry on the 3rd, starting from the 2nd (local time), the Chinese government issued a 7-day lockdown order for the industrial complex housing Foxconn's plant in Zhengzhou, Henan Province, leading to a mass exodus of factory workers. If Foxconn's production decreases or halts, Apple as a set (finished product) company will inevitably have to adjust shipment volumes. This is expected to place considerable pressure on Samsung and LG-affiliated component suppliers known to supply Apple. Samsung Display, LG Display, and LG Innotek provide panels and camera modules for the iPhone 14 Pro and Pro Max lineups.

Several industry insiders were cautious about mentioning direct dealings with the so-called 'gap (甲)' set companies but expressed that there is no immediate major damage and that they are carefully observing future developments. However, component suppliers believe that even Apple would find it difficult to drastically reduce shipments of the latest premium product, the iPhone 14, in a short period. An anonymous component company official said, "So far, no unusual or changing management conditions have been detected after the Foxconn worker escapes," adding, "Foxconn only has other production lines within China, and Apple is also unlikely to significantly cut premium model production, so we will watch the situation carefully."

There is indeed some discrepancy between domestic industry observations and analyses from major foreign media. Although the 'Foxconn risk' may not be an immediate 'fire on the roof' as domestic companies suggest, it is not a situation to be complacent about. According to major foreign media reports citing Foxconn production line insiders, Apple plans to reduce iPhone production by at least 30% and up to 50% this month.

Component companies known to do business with Apple but also having a diverse customer portfolio including Galaxy are equally cautious. A company official said, "We have more Galaxy volume than iPhone, so the impact on our company is minimal," adding, "We are considering entering supply for major customers' new products in the fourth quarter." Another component supplier said, "The internal atmosphere is not shaken by the Foxconn-related situation during product supply to Apple," and added, "Although Apple is a huge company, there has been no official statement from Apple yet, and it is still at the 'rumor' level, so we will approach this cautiously."

According to the industry, Foxconn, headquartered in Taiwan, is the largest manufacturer of Apple iPhones. The Zhengzhou Foxconn plant produces 80% of the iPhone 14 series and over 85% of the iPhone 14 Pro. The iPhone 14 series, launched by Apple last September, is a premium product that serves as Apple's cash cow.

This content was produced with the assistance of AI translation services.