What you need to know
- Apple supplier Foxconn is slowly getting back to normal.
- Its manufacturing capacity has been reduced due to coronavirus.
- It expects to be back to normal by the end of March.
Following staffing shortages as a result of coronavirus – not to mention factory closures – Foxconn expects to be able to get its Chinese operations back to normal by the end of this month.
The company said today that its Chinese factories are currently operating at around 50% capacity, but it expects to be able to ramp that up in the coming days and weeks, according to a Bloomberg report.
The Taiwanese company, which assembles the majority of the world's iPhones from China, joins a growing number of corporations envisaging a return to normalcy in the world's No. 2 economy. Beijing has curbed the spread of an epidemic that erupted in January and forced millions to work from home, tangled up logistics and dented economic growth. Hon Hai said Tuesday its factories are now operating at about 50% of seasonal capacity but that should ramp up over the course of the month as workers stream back into its plants.
However, Foxconn chairman Young Liu has spoken about the difficulties in understanding just how disruptive the coronavirus situation will be in the long run. While China appears to be turning a corner on the outbreak, it's impossible to predict what might happen next. He also told investors that demand for consumer electronics as a whole may well be lower due to the outbreak, impacting Foxconn's sales for the first half of 2020.
"There's not a huge hit on demand yet so far, but I dare not and don't want to predict the outlook of the outbreak," Liu said. "We don't see a huge issue with our suppliers and we are helping them to secure resources."
While this time of year is normally a relatively quiet one for Foxconn, iPhone 9 has been rumored to launch this month. If that's accurate we'd expect Foxconn to be into ramp-up mode already as Apple builds inventories for the new launch. At this point it isn't clear whether coronavirus – and the subsequent issues it's caused Foxxconn – has had any bearing on the announcement of iPhone 9.
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