Apple Supplier Foxconn Hopes to Resume Half of Output in Virus-Hit China by Month-End – News Description

Apple Supplier Foxconn Hopes to Resume Half of Output in Virus-Hit China by Month-End

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Taiwan’s Foxconn hopes to resume half of its production in China by month-end, a source told Reuters on Wednesday, as the supplier to tech giant Apple and others reopens plants shut over a coronavirus outbreak. The world’s largest contract electronics maker also aims to resume 80 percent of production in China in March, added the source, who has direct knowledge of the matter, citing internal targets set by Chairman Liu Young-Way.

Foxconn’s reopenings after the Lunar New Year holiday were delayed by the rapid spread of the virus in China, which has killed more than 1,100 people, as the World Health Organization warned against a global threat potentially worse than terrorism.

“Chairman Liu hopes by end of February the production could reach 50 percent,” said the person, who declined to be identified in the absence of authorisation to speak publicly.

“Shipments will be affected, but it’s too early to give an exact number. We might still have a chance to make it with overtime, but we also need to monitor consumer sentiment to come for the end products,” the source added.

The reference was to electronics, including smartphones.

Foxconn did not immediately respond to email and telephone calls to seek comment.

Foxconn got the green light this week to reopen major plants in China, and its plant in the eastern city of Kunshan was also approved on Tuesday to resume production, an internal document reviewed by Reuters showed.

But just about a tenth of the workforce had returned to two key plants in southern Shenzhen and central Zhengzhou as of Monday, a source told Reuters.

The two plants make up the bulk of Foxconn’s assembly lines for Apple’s iPhones and further delays to production after the enforced closures could hit global shipments.

Apple estimated first-quarter revenue in a wider range than usual to factor in the virus uncertainty.

On Monday, Foxconn reported a drop of 12 percent in revenue in January from a year ago, to TWD 364.6 billion ($12 billion). It did not give details.

Shares of Foxconn, formally Hon Hai Precision Industry, gained 3.1 percent on Wednesday, outperforming a rise of 0.9 percent in the benchmark index.

The shares have lost more than 7 percent since the market reopened after the holiday break.

© Thomson Reuters 2020

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