• A five-day Covid shutdown in Zhengzhou, central China has been lifted, providing much-needed relief for Apple.
• Zhengzhou is the location of the largest iPhone manufacturing in the world.
• The complex is owned by Taiwanese contract manufacturer Foxconn and employs over 200,000 people.

A five-day Covid shutdown in Zhengzhou, central China, the location of the largest iPhone manufacturing in the world, has been lifted, according to analysts, providing much-needed relief for both Apple and its primary supplier Foxconn.

The “iPhone City” complex in Zhengzhou, which is owned by the Taiwanese contract manufacturer Foxconn, employs over 200,000 people to produce goods for Apple (AAPL), including the iPhone 14 Pro and 14 Pro Max.

On Friday, the city imposed a five-day lockdown on its metropolitan areas due to an increase in Covid-19 cases.

On Wednesday, local officials reportedly eased lockdowns in a number of Guangzhou neighborhoods, according to Chinese state media. After locals and police battled on Tuesday, the earlier this month imposed limits on the manufacturing and transportation center were loosened.

Social media users have posted videos of locals yelling “remove the lockdown.”

The enormous site owned by Foxconn is separate from Zhengzhou’s metropolitan areas. The closure, according to observers, would have hurt efforts to resume production at the campus, the scene of a violent workers’ uprising last week.

“This is some good news in a dark storm for Cupertino,” Daniel Ives, managing director of equity research at Wedbush Securities, told media, referring to the California city where Apple is based.

“There is a lot of heavy lifting ahead for Apple to ramp back up the factories.”

Ives calculates that Apple was losing about $1 billion in sales of iPhones each week as a result of the continued supply issues at Foxconn’s Zhengzhou campus.

The issues began in October when staff members abandoned the campus in Zhengzhou, the administrative center of the central province of Henan, out of concern over Covid.

As a result of the staff shortage, bonuses were provided to employees.

However, when the recently hired personnel claimed management had broken their promises, there were protests last week.

The workers eventually received monetary offers to leave after fighting with the security guards.

According to analysts, Foxconn’s production issues will hasten the supply chain’s migration away from China and toward nations like India.

ATF International Securities analyst named Ming-Chi Kuo said that iPhone shipments in the current October to December quarter could be 20% lower than anticipated in a post on social media.

According to him, the Zhengzhou plant’s average capacity utilization rate was only around 20% in November and was projected to increase to 30% to 40% in December.

Kuo estimates that the total number of iPhone 14 Pro and 14 Pro Max shipments in the current quarter would be 15 million to 20 million less than initially projected.

He continued, “Apple’s overall iPhone revenue in the current holiday quarter may be 20% to 30% lower than investors’ estimates because to the high price of the iPhone 14 Pro series.”

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