World’s largest iPhone factory loses momentum amid supply chain diversification away from China

The world’s largest iPhone factory, in the central Chinese city of Zhengzhou, is offering higher bonuses to attract workers needed for its busy season ahead of the launch of new models from Apple, but it is “not what it used to be”, according to workers and labour agents at the site.

The Foxconn Technology Group compound in Zhengzhou, capital of central Henan province, is closely watched as a gauge of whether China can maintain its role in the global supply chain. A recent visit to the site found that the factory has lost some of its momentum, as major customer Apple has been shifting production to countries like India. According to local residents, the dramatic disruptions in late 2022 when thousands of Foxconn workers fled the factory in fear of draconian Covid-19 control measures, also dealt a heavy blow to the role of the factory.

Multiple workers, hiring agencies and small business owners told the South China Morning Post that the number of workers, which reached nearly 300,000 in the peak season, has significantly dropped since the 2022 unrest, which prompted Apple to warn of iPhone shipment delays that Christmas season.

Taiwan-based Foxconn, formally known as Hon Hai Precision Industry, did not disclose details on its current production and employment at Zhengzhou.

In a statement issued to the Post on Tuesday, the company said it has invested a lot in automation and digitalisation that has “improved efficiency and production”, adding that “quality, not just quantity, of employment is an important gauge of staying competitive and moving up the value chain.”

A man surnamed Gao, in his mid-50s, said he makes roughly 200 yuan per day (US$28) offering workers rides on an electric tricycle, which is half of what he earned before the unrest. A man surnamed Ye, who worked at the factory in 2022 and returned recently, said “Foxconn isn’t what it used to be”, adding that the streets are much quieter now.