Foxconn Plant Shuttered in India
Last Saturday Foxconn (2354.TT) closed its assembly plant in Chennai, India, not due to an outbreak of COVID-19, but due to food poisoning that put 159 of the ~12,000 plant workers in the hospital and left another 256 being treated as outpatients. The food poisoning, which was allegedly linked to contamination from waste water (unconfirmed), led to protests led by over 4,000 workers who blocked a key highway, leading to some arrests. The plant will reopen on Monday, having been empty for the week. The Foxconn plant assembles Apple’s (AAPL) iPhone 12, along with some models of Amazon’s (AMZN) Fire Stick, and a small number of Xiaomi (1810.HK) products, but was recently said to be assembling small quantities of the iPhone 13 on a trial basis.
India is currently trying to gain credibility with both semiconductor and panel producers globally, with the intension of building a supporting infrastructure for downstream production rather than upstream assembly. The government has downplayed the issue at Foxconn and maintained control over the protests to present an affable face to potential CE companies, but at the end of 2020, a protest at a Wistron (3231.TT) plant in Kolar, India, saw violence erupt of unpaid wages, leading to $60m in damages, with. Wistron also being an Apple iPhone assembler. As production for the holidays has already taken place, expectations for any impact on Apple’s iPhone deliveries are minimal, but more important would be the optics seen by potential semiconductor or display fan companies, who are already concerned that India will not have the resources to build an ecosystem that could support in-country production.
India is currently trying to gain credibility with both semiconductor and panel producers globally, with the intension of building a supporting infrastructure for downstream production rather than upstream assembly. The government has downplayed the issue at Foxconn and maintained control over the protests to present an affable face to potential CE companies, but at the end of 2020, a protest at a Wistron (3231.TT) plant in Kolar, India, saw violence erupt of unpaid wages, leading to $60m in damages, with. Wistron also being an Apple iPhone assembler. As production for the holidays has already taken place, expectations for any impact on Apple’s iPhone deliveries are minimal, but more important would be the optics seen by potential semiconductor or display fan companies, who are already concerned that India will not have the resources to build an ecosystem that could support in-country production.
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