Apple is accelerating plans to move production out of China as protests and riots intensify in response to zero-Covid policies, report says

As protests swell over the country's strict zero- Covid policies and riots disrupt production, Apple wants to quickly shift away from China.

According to the Wall Street Journal, the technology giant is moving production to other Asian countries in order to distance itself from one of its top suppliers and operators of the world's largest iPhone factory in China.

Sources told the Journal that recent uprisings at the Zhengzhou plant are propelling Apple into action and that the move has been planned for months.

In November, the area known as "iPhone City" erupted into violent protests among employees over withholding pay and strict zero- Covid policies that led to a lock down in Zhengzhou. As demonstrations grew, Foxconn, which employs upwards of 300,000 factory workers, offered them money to quit their jobs and bonuses to keep them.

Significant supply chain issues and shortages of Apple products have been caused by the protests that coincide with the start of the holiday shopping season. As a result of the demonstrations, the company is expected to have a shortfall of 6 million iPhones.

The turmoil's impact on Apple's bottom line has led to a sense of urgent need to shift production away from China. The economic downturn is making it difficult to forge partnerships with new suppliers.

Kate Whitehead, a former Apple operations manager and owner of a supply-chain consulting firm, said finding all the pieces to build at the scale Apple needs is difficult.

According to the Journal, Apple plans to source up to 45% of iPhone production from India, where it currently manufactures in just the single digits.

"This last month in China has been the straw that broke the camel's back for Apple in China with the head-scratching zero- Covid policy with major strategic changes ahead for Cupertino in this key region," said Daniel Ives in a note to clients.