China: Massive Flooding In Zhengzhou, 'iPhone City' Of World, Could Impact Production Targets Of Key Apple Supplier Foxconn

Catastrophic flooding in Henan province of central China is likely to put pressure on Apple’s key supplier Foxconn to meet production targets set for iPhone 13 as the company extends workers’ leave into the third day, South China Morning Post reported.

At least 33 people have died and around 1.24 million have been displaced as devastating floods wreaked havoc in Henan Province. Life in the capital city of Zhengzhou, which bore the brunt of the flood fury, was completely paralysed. The city's drainage system collapsed due to relentless downpour flooding many residential areas.

Foxconn employs at least 2,50,000 workers in its three major production units in Zhengzhou. Zhengzhou is often dubbed iPhone City, because more than half of Apple’s smartphones are assembled there at Foxconn facilities. The company’s biggest plant in the city, with the capacity to produce 500,000 phones a day, is located near the city’s airport, while the two affected plants are smaller assemblies.

On Wednesday(Jul 21), Foxconn said that water breached the perimeter of Foxconn's iPhone manufacturing complex in the city, affecting deliveries of components and disrupting the commutes of some employees.

Foxconn was expected to start mass production of the next generation iPhone 13 later this month to meet Apple’s target of 90 million units available at launch.

Addressing the company's annual shareholders meeting, Foxconn Chairman Young Liu ruled out serious disruption to production schedule due to massive flooding of Zhengzhou.

Liu also said Foxconn also plans to build more regional manufacturing centers around the world. The company already has a global production footprint, and will keep building complete regional supply chains to keep up with demand.

"It's an era in which all companies need to build regional centers," Liu said, marking a change from the previous concentration of manufacturing in one place, such as China.

"Foxconn is building vertical integration supply chains across all regions, like what we built in China in the past," he added