Foxconn ‘Cautiously Resuming’ Chinese Factory Production

Taiwan-based electronics manufacturer Foxconn has confirmed it is restarting production at its main Chinese factories, amid the deadly Coronavirus outbreak in the mainland.

Last week the world’s largest contract electronics maker had denied media reports that its factories in China were operational, after Reuters had suggested that only 10 percent of the workforce were available to work at its factories.

Factory closures in China led Apple earlier this week to warn of an iPhone shortages and that its current quarter would be hurt by the coronavirus outbreak, because of factory shutdowns.

Production restarting

But now Foxconn has told Reuters on Thursday that it is cautiously restarting production at its main plants in China.

It also warned revenue will be hurt this year by the coronavirus epidemic.

Foxconn also confirmed that due the deadly epidemic in China, its factories in other countries such as Vietnam, India, and Mexcio had continued to operate at full capacity. It is also planning expansions at those plants to minimise the impact of the coronavirus.

Foxconn, like other manufacturers in China, have been struggling to deal with staff shortages, after Chinese authorities placed strict travel and quarantine restrictions on people.

These restrictions vary by province, city and local district, and have also impacted the transportation of goods and equipment around China.

Foxconn, formally known as Hon Hai Precision Industry, hopes to have production levels in China at half of normal levels by the end of February, a source with direct knowledge of the matter told Reuters last week.

Smartphone shortages

But as mentioned above, Foxconn said earlier this week that the Reuters reports were not factual but did not did elaborate on the production status of the Chinese factories, as this is commercially sensitive information.

However it seems unlikely that Foxconn’s Chinese factories will return to full production for a few weeks yet.

Apple has closed all 42 stores in China because of the outbreak.

Analysts meanwhile have estimated that the outbreak could cut demand for smartphones by half in the first quarter in China (the world’s largest smartphone market).

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