Extension Of Closure of Foxconn China Factories Could Hit iPhone Output For Apple: Reuters

In case of the temporary production halt at Foxconn’s Chinese factories because of the coronavirus outbreak into a second week could significantly impact the shipments to customers and there can be a a “big” production impact, impacting its customers including Apple, said a report published by the news agency Reuters citing a source with knowledge of the matter.

The source reportedly told Reuters that production of “almost all” of the products that it made by the Taiwan based Foxconn, which is the largest contract manufacturer of smartphones for Apple, as well as major vendors for other brands, has been temporarily halted till at least February 10. But any extension to the temporary production stoppage beyond February 10 could create a severe disruption in supply of products and parts to the company’s client including Apple.

There were no comments available in the report from the Taipei-based Foxconn and Apple.

The outbreak of the coronavirus has had a “fairly small impact” on Foxconn, said the source to Reuters primarily because the company is also making use of its production facilities in countries outside of China including in Vietnam, India and Mexico in order to make up for the halt in production in China. The report also said that any deficiencies in production and supply can be caught up by the company if the production units work overtime after the lifting of the temporary ban on production in China.

While authorities in Eastern China’s Suzhou which is one of the biggest manufacturing regions of China, has asked firms to keep production on halt till at least February 8.on the other hand, a minimum closure date of till February 10 have been issued for manufacturing units in the southern manufacturing hub of Dongguan in export-oriented Guangdong province.

The production and supply chain of large number of Chinese manufacturing firms is threatened by the outbreak of coronavirus which has been declared as a global health emergency by the World Health Organization.

Reflecting on the possibility of the extension of the halt in production in Foxconn’s factories in the southern province of Guangdong and the city of Zhengzhou in Henan – both of which are crucial for production of parts of and the assembling of the iPhone , the report quoted the source as saying that shipments of the company could be disrupted if the halt in these two facilities is extended beyond February 10.

“What we are worried about is delays for another week or even another month. The impact would be big,” the source reportedly said. “It definitely will have an impact on the Apple production line.”

“The tricky question is whether we will be able to resume production (on Feb. 10)…It’s up to the instructions given by central and provincial governments.”

The report further goes on to say that and clients employees have been not to return to factories by Foxconn who are based in China’s Hubei which is the epicenter of the outbreak and have been asked ot make regular reports to their concerned managers about their health conditions.

(Adapted from Reuters.com)

Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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