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Floods May Trigger Production Delays in China's ‘iPhone City’ 


An aerial view shows a flooded road following heavy rainfall in Zhengzhou, Henan province, China, July 23, 2021.

As Zhengzhou residents wonder if the toll from record rainfall in China’s Henan province will exceed the latest tally of 58 deaths, authorities were estimating the province has incurred $10 billion (65.5 billion yuan) in economic losses in the manufacturing center.

Torrential rains have inundated the province since last weekend. As a result, supply chains have been disrupted for the region’s many factories, including a complex in Zhengzhou where almost half of Apple's iPhones sold worldwide are produced. That's why Zhengzhou is sometimes referred to as "iPhone City."

Hon Hai Technology Group, a Taiwanese multinational electronics contract manufacturer better known as Foxconn, operates the Zhengzhou complex. Nikkei Asia reported that Foxconn Chairman Young Liu told the company's annual shareholders meeting in Taiwan that the floods have had a limited impact on the complex.

A source familiar with Hon Hai Technology Group who was not authorized to speak to the press told VOA Mandarin that one of the group’s three plants in Zhengzhou had been flooded. The flooded plant produced PC connectors, not mobile phones, according to the VOA Mandarin source, who added that iPhone production was unlikely to be interrupted because no machinery was damaged and Foxconn maintains a full stock of required materials and parts.

FILE - A man sits on a stranded vehicle on a flooded road following heavy rainfall in Zhengzhou, Henan province, China, July 22, 2021.
FILE - A man sits on a stranded vehicle on a flooded road following heavy rainfall in Zhengzhou, Henan province, China, July 22, 2021.

Apple is scheduled to release the iPhone 13 in September, according to numerous press reports tracking the company. But as long as transportation resumes soon, the new iPhone 13 will not be delayed, the source said.

However, transit cleanup may be delayed by the scope of the devastation, and an analyst told VOA Mandarin that iPhone 13 production depends on whether the local transportation recovers quickly.

Travel snagged

Qiu Shi-Fang, senior analyst at the Taiwan Institute of Economic Research, told VOA Mandarin that iPhone components are usually shipped to the assembly plant in July and the first batch of iPhones is finished in August. She said the arrival of components would affect subsequent shipments of new phones.

However, streets have been turned into rivers, and flights and trains in many parts of Henan have also been suspended, creating uncertainty about iPhone production.

Foxconn has more than 90 production lines with about 350,000 workers at its Zhengzhou plants. Qiu said Foxconn is facing difficulties in hiring workers from outside Zhengzhou because of flood-related transit snarls.

Qiu said if Zhengzhou fails to return to normal by the end of July, iPhone 13’s production may be delayed.

The floods also damaged thousands of cars in Henan province. Multiple reports from the local car insurance industry suggest the floods damaged 30,000 to 80,000 cars, which may cost insurance companies more than $154 million (1 billion yuan) in compensation.

Throughout Henan province, 11 insurers had received claims for almost 32,000 damaged cars by Thursday, according to Reuters.

Zhengzhou, a traditional automotive industry hub, produces about 500,000 vehicles annually, accounting for about 3% of China's output from large manufacturers, such as Yutong Bus, Haima Motor and Zhengzhou Nissan.

Agriculture in Henan was also hard hit by the rains, with more than 200,000 hectares of farmland underwater, according to Reuters.

Adrianna Zhang contributed to this report.

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