ZHENGZHOU, CHINA—Foxconn, one of Apple's largest suppliers, is experiencing significant disruptions at its biggest iPhone assembly factory in China, as workers reportedly fled the locked-down facility and city.

China's zero-Covid policy is putting a tremendous strain on Foxconn just before the holiday shopping season begins and highlights how the country's stringent Covid policy is hurting international business.

Analysts said the chaos at Zhengzhou could jeopardize Apple and Foxconn's output in the coming weeks. Ivan Lam, senior research analyst at Counterpoint, estimated that between 10% and 30% of iPhone 14 production could be affected in the near term if the situation does not stabilize.

The Zhengzhou campus is the world's biggest iPhone factory and typically accounts for as much as 85% of iPhone assembly capacity, according to Lam's estimates. A Foxconn spokesperson told Chinese state media that the company is trying to boost production at other sites. Shares in Foxconn, also known as Hon Hai Precision Industry, fell 2.6% on Tuesday.

Videos of many people leaving Zhengzhou on foot have recently gone viral on Chinese social media. The city, which has a population of more than 12 million, imposed sweeping lockdown measures earlier last month after identifying dozens of Covid-19 cases. State media has said that many Foxconn workers are among those walking miles to escape the city. Calling it a "helpless move for some employees," a Foxconn manager told media outlet Yicai that workers are panicking over the spread of the virus at the factory and lack of access to official information.

As Beijing shows few signs of moving away from its rigid Covid policies, Apple has started to boost production in other countries, including India, to reduce its dependence on China.