The lockdown of Foxconn’s Zhengzhou factory, the world’s largest maker of iPhones, has highlighted some of the risks associated with reliance on China’s non-Covid manufacturing sector, analysts told AFP.

Foxconn, Apple’s main subcontractor, has seen a spike in Covid-19 cases at its Zhengzhou site, prompting the company to lock down the huge complex to keep the virus at bay.

Images then emerged of panicked workers fleeing the site on foot after allegations of poor conditions at the facility, which employs hundreds of thousands of workers.

Foxconn is China’s largest private sector employer, with over a million people working in its thirty or so factories and research institutes nationwide.

But Zhengzhou is the crown jewel of the Taiwanese giant, producing iPhones in quantities unseen anywhere else.

“Typically, almost all iPhone production takes place in Zhengzhou,” said Ivan Lam, an analyst at specialized firm Counterpoint.

Apple manufactures more than 90 percent of its products in China, which is also one of its most important markets.

“It’s another bad example for Apple in terms of production chain stability,” Alicia Garcia Herrero, Asia Pacific manager at Natixis Bank, told AFP.

Experts say the company’s heavy reliance on China “poses potential risks, especially if the US-China trade war shows no signs of de-escalation,” according to consultancy Dezan Shira & Associates.

Opened in 2010, the Zhengzhou factory employs up to 300,000 people who live on-site year-round, creating a sprawling technology hub known as “iPhone City.”

It consists of three factories, one of which produces the iPhone 14 – Apple’s latest model of phone.

Apple didn’t respond to AFP’s request for comment on exactly how the lockdown will affect its production.

Analyst Lam estimates that the partial halt to work at the site resulted in a “10 to 30 percent” loss of production, but said some production was also temporarily moved to other Foxconn sites in China.

According to Foxconn, the site is currently operating on a “closed loop” in which workers avoid all contact with the outside world while their daily bonuses have been quadrupled.

“This incident may have a limited impact on global iPhone production,” said Apple product analyst Ming-Chi Kuo.

“But suppliers in China must learn to improve closed-loop production efficiency in response to the zero-Covid policy,” he added.

China is the latest major economy to commit to a zero-Covid strategy, sticking to quick lockdowns, mass testing and lengthy quarantines to contain emerging outbreaks.

But new variants have tested local officials’ ability to wipe out flare-ups faster than they can spread, leaving much of the country living under an ever-changing mosaic of Covid curbs.

Apple has already begun to outsource some of its manufacturing to India and is eyeing Vietnam to wean itself off Chinese manufacturing – a trend accelerated by Covid.

But it’s not that simple — nearly 7.5 million iPhones were made in India last year, just 3 percent of Apple’s total production.

“Increasing the capacity of factories (in India) is difficult,” Lam said.