Apple shares drop following Foxconn crisis

Apple shares fell about 2.6 per cent on Monday, making it one of the Nasdaq 100 index’s biggest percentage losers, weighing on the broader market as growing unrest at a key Chinese plant spread fears of a bigger hit to already limited production of higher-end iPhone 14 models due to unrest at a Foxconn factory in China.

The upheaval at Apple’s key manufacturing hub of Zhengzhou is not only causing a drop in Apple shares, but it is also expected to result in a production shortfall of close to 6 million iPhone Pro units this year.

According to Wedbush Securities, Apple could lose volume due to production disruptions in the first quarter, with at least 5 per cent of units affected and potentially up to 10 per cent.

The unrest at Foxconn coincides with Chinese protests against the country’s zero-Covid policy. Covid-19 cases have increased in mainland China, prompting residential lockdowns and business closures in a number of major cities. Protests have erupted across the country in response to the lockdowns, including at the Foxconn iPhone assembly plant in Zhengzhou.

Apple shares fell 3.4 per cent in November, while the Nasdaq Composite index gained 2 per cent.

The sources for this piece include an article in Reuters.

IT World Canada Staff
IT World Canada Staff
The online resource for Canadian Information Technology professionals.

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