(Bloomberg) — Hon Hai Precision Industry Co., one of the largest employers in China and a key supplier for Apple Inc., experienced a significant drop in its stock price after Beijing initiated investigations into its operations in the country. This news comes as a blow to the Taiwanese firm, which manufactures the majority of iPhones worldwide in its factories located in central and southern China. The stock price of Hon Hai fell by 3.4% during early trading on Monday.
Known as iPhone City, Foxconn, a subsidiary of Hon Hai, is Apple’s crucial assembly partner, producing millions of iPhones annually from its massive complex in Zhengzhou. The Chinese tax authorities are currently conducting inspections on Hon Hai’s subsidiaries in Guangdong and Jiangsu provinces, as stated by unidentified sources familiar with the issue, reported the state-run Global Times on Sunday. Moreover, officials from the natural resources department are investigating the company’s land usage in Henan and Hubei provinces.
While no further details regarding the investigations have been provided, Hon Hai has announced its intention to collaborate with Chinese authorities on these probes. However, the company did not disclose any specific details in their filing with Taiwan’s stock exchange.
For more information, please read: Apple Supplier Foxconn Working With China on Some Probes
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