Apple Supplier Foxconn Expects Its Chinese Factories To Run At Full Capacity by March-end


Apple’s major supply-chain partner Foxconn has announced that it expects production to go back to its full capacity in China by the end of March. Nonetheless, the company expects a 15% decline in its revenue in the first quarter due to the virus outbreak. 

Foxconn first extended the lunar New Year Holiday of its factory workers due to the coronavirus outbreak. After that, since the outbreak expanded and Wuhan was shut down, many Foxconn workers were wary of returning to work. This impacted production as Foxconn’s factories were slow to resume production.

Since Foxconn is one of the key suppliers of Apple, the stock of various Apple products has been affected due to the extended shutdown. Apple acknowledged that the iPhone supply was constrained worldwide and it expects it to return to normal only in Q2.

Foxconn’s Chairman Liu Young-Way said that the impact of the virus on its supply chain was “not that great.” The company’s co-operation with suppliers will also provide a cushion against the rise in some component prices.

Foxconn factories returning to its full capacity should be good news for Apple as it could allow the company to go ahead and launch the iPhone 9 later this month.

Our Take

It is still unclear as to how the coronavirus outbreak will impact the launch of the iPhone 12 later this year. Apple engineers tend to travel to China at the beginning of the year to work on new iPhone launches for later this year. However, most companies and countries have imposed a travel ban on their employees due to the virus. This could push back the mass production of the iPhone by a few weeks to a month depending on how long the shut down in China is in place.

[Via Reuters]