Tech companies which have manufacturing facilities in mainland China are likely to face disruption following the massive outbreak of COVID-19 in the country after the government dropped its zero-COVID policy.

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Economic activity in China slowed in December with more people staying home to avoid getting sick or to recover following the abrupt easing of tough restrictions. Till now, there is no reliable data on the extent of the spread of the virus in the country or the number of sick and dead people, Bloomberg reported.

Amid the widespread COVID-19 outbreak in China, Apple’s business has come under threat as supply chain experts have warned of a growing risk to the production of iPhones.

Following the turmoil, the tech giant has accelerated plans to shift some of its production outside China. The iPhone maker has asked suppliers to plan more actively for assembling Apple products in India and Vietnam and reduce dependence on Taiwanese assemblers led by Foxconn, The Wall Street Journal reported.

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With the Chinese government reversing the zero-COVID policy, the company is likely to face further disruption due to worker shortages at component plants or assembly factories across the country.

“We should be seeing a lot of operations get impacted by absenteeism, not just at factories, but a warehouse, distribution, logistic and transportation facilities as well,” Financial Times quoted Bindiya Vakil, CEO of supply chain mapping company Resilinc, as saying.

Apple is not the only company facing disruption in China due to the COVID-19 outbreak. Electric carmaker Tesla suspended manufacturing at its Shanghai plant on December 24, Reuters reported quoting an internal notice and two sources. The Elon Musk-led company was expected to shut down the plant over New Year. However, the decision came earlier than expected.

Other companies like Samsung Electronics, Microsoft, Google, Dell and Hewlett Packard, who have manufacturing facilities in China, are also likely to be affected by the rise in COVID-19 cases.

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(Edited by : Sudarsanan Mani)