Major Apple suppliers say that they currently plan to resume production in China on February 10.
Most large Chinese companies have extended the Chinese new year holiday in order to limit the spread of the coronavirus. February 10 is the government’s target date to re-open factories and re-start production…
Bloomberg reports four major Apple suppliers adopting this target.
Foxconn’s Hon Hai, the most important manufacturer for the U.S. company, said Tuesday it still expects to be able to restart facilities throughout China on schedule, according to a text message sent to Bloomberg News. Suppliers such as Quanta Computer Inc., Inventec Corp. and LG Display Co. also said they would go back to work next week in China.
Apple also currently plans to re-open its retail stores and offices on the same date. The company has acknowledged the uncertainties around the impact of the virus, and given broader-than-usual guidance for the current quarter. Analyst Ming Chi-Kuo has estimated that iPhone shipments could be 10% down on expectations.
A-series chip supplier TSMC had previously said that production remained on-track, following reports that a number of Apple products could be hit – including the new budget iPhone 9/SE 2 expected to launch next month.
Some have suggested that February 10 isn’t realistic given the spread of the virus.
Doubts about the timing have grown in recent days as the virus death toll rises, workers find themselves stuck in municipal lockdowns and the transport of people and goods has been hampered. More than 20,000 people have been infected with the virus and more than 400 have died.
However, others say that the massive logistics operation necessary to resume public transit services on that date makes it unlikely the government will change the date. Many workers traveled significant distances to be home with family during the holiday and will need to get back to cities to resume work.
“The main variable is whether the government will push back the time for resuming production, though it is not very likely given the complexities of organizing transportation for the returning migrant workers,” said GF Securities analyst Jeff Pu. He added that any potential labor shortage is a serious issue that weighs on the minds of suppliers.
Image: An electron microscope image of the 2019 novel coronavirus by Hong Kong University.
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