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iPhone deliveries were halted due to the China Covid lockdown.

iPhone deliveries were halted due to the China Covid lockdown.

The tech behemoth said that its Chinese assembly plant is now working at a drastically reduced capacity.

On November 2, authorities shut down a neighborhood where Foxconn has its largest iPhone factory for seven days.

The announcement from Apple comes as China reaffirms its commitment to zero covid.

Investors who hoped China would soon relax its Covid restrictions will likely be disappointed by the announcement. On Friday, Chinese financial markets gained significantly as a result of rumors that Covid lockdowns will soon end.

Beijing’s unrelenting strategy for halting the virus’s spread has come at a significant financial cost. However, Xi Jinping, the president of the country, who has personally approved the policy, has not indicated that it will be eased any time soon.

The world’s second-largest economy is likely to show signs of adjusting to hurdles faced by continued Covid restrictions, a protracted real estate collapse, and the possibility of a worldwide recession based on trade figures and foreign currency data that are coming later on Monday.

According to figures on China’s third-quarter gross domestic product, the country’s economy recovered quicker than anticipated to 3.9% thanks to an increase in government spending.

On Sunday, the nation reported 5,643 new Covid infections, the highest daily total in six months. The Foxconn facility is situated in Zhengzhou, the provincial capital of Henan in central China, which has a population of around 10 million. On Monday, there were 3,683 cases and 22 fatalities.

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Additionally, cases were found within the factory, which caused a rapid shutdown and the evacuation of the staff.

Due to China’s Covid control measures, Foxconn, the largest contract electronic manufacturer in the world, has cut its fourth-quarter projection downward. Due to the increase in demand for electronics before the Western world’s end-of-year holiday season, the fourth quarter is typically a busy one for IT companies.

The Henan provincial government and the Taiwan-based corporation are collaborating “to stamp out the epidemic and return production to its full capacity as rapidly as feasible,” according to the statement.

Seventy percent of iPhone shipments worldwide are made by Foxconn, formerly known as Hon Hai Precision Industry.

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