Foxconn, the Taiwanese electronics making company, is shutting down operation in Shanghai due to a rise in Covid-19 cases onsite. According to a report from South China Morning Post, the company has suspended production at two factories, Dianfa and Fuhong, in the eastern city of Kunshan near Shanghai.
The factory makes data transmission equipment and connectors. Foxconn is also known to make the iPhone and other Apple products. However, the company downplayed the suspicion of low yield and said it will have no effect on the inventory levels as a whole, in regards to the iPhone.
In a statement, Foxconn said:
"As production has previously been deployed to backup factories, the factory's main products are located in overseas shipping warehouse and inventory levels are still sufficient, the impact on the company's business is limited."
China has put factories in Shanghai under a tight lockdown since mid-March this year. This has resulted in even more supply chain issues across the globe, while China's own chip-manufacturing capacity dropped by 4.2%.
The factory workers were living and working onsite in a closed loop, which is similar to what was practiced during the Olympics. This was done to ensure the production capacity remains unharmed during Shanghai's strict lockdown as China's "dynamic zero COVID" policy prevails.