Apple supplier Foxlink's factory in southern India is unlikely to resume full operations for two months after a fire incident, raising concerns of supply chain disruptions for the iPhone maker, a source with direct knowledge told Reuters on Tuesday.
The facility in the Chittoor district of India's Andhra
Pradesh state, where Foxlink makes charging cables for iPhone models, was
engulfed in a massive fire on Monday that led part of the building to collapse
to the ground. There were no casualties.
The source with direct knowledge said that Foxlink operates
a total of 10 assembly lines in two separate facilities at the plant in Andhra,
of which four were completely damaged and unlikely to resume operations for two
months.
Production at the remaining six assembly lines is expected
to resume later this week. Even though they were unaffected by the fire
incident, they cannot be operated currently due to damage to IT servers.
A second source familiar with the developments said that
Foxlink was a key supplier for Apple in India, and "there could be
potential supply chain disruptions for iPhones made in India or shipped from
India".
Apple and Foxlink did not immediately respond to requests
for comment. The cause of the incident is still being investigated, the first
source added.
The incident is the latest problem to hit Apple suppliers in
India, from where it is increasingly ramping up manufacturing and exports.
Apple has 11 suppliers in the country.
Production was hit at a facility of Apple contract
manufacturer Foxconn in 2021 due to food poisoning among workers, and a Wistron
India plant was in 2020 hit by worker unrest over non-payment of wages.
Impact on business
Reuters visited the Foxlink site on Tuesday where a part of
the building was completely charred and where residue smoke was still coming
out from some parts.
Many workers gathered outside the facility, with some
anxious about the status of their contract jobs. They told Reuters the fire
broke out during lunch break on Monday, and some air conditioners exploded as
fire spread.
"The fire became uncontrollable," one worker said,
declining to be named.
Foxlink management is currently reviewing the situation and
expects to have a clearer picture of the impact on the business over the next
two days, the first source added.
A police official told Reuters on Monday there was an
estimated loss of $12 million at the factory. Employees said the Foxlink
factory makes charging cables used in iPhones, but it was not immediately clear
if Apple has other suppliers for the cables in India.
Cupertino, California-based Apple has bet big on India since
it began assembling iPhones in the country in 2017 via Wistron and later with
Foxconn, in line with the Indian government's push for local manufacturing. © Reuters