Foxconn, Apple’s iPhone assembler, expects its factories in China to return to normal by the end of this month after resolving severe labor shortages due to the COVID-19 coronavirus outbreak.
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.
Foxconn has already slashed its 2020 revenue projections in the wake of the epidemic. The contagion has disrupted Apple’s carefully calibrated production chain: Hon Hai was forced to postpone the reopening of its “iPhone City” mega-complex in the central city of Zhengzhou while it imposed strict quarantine measures on thousands of laborers. But Foxconn has since sharply raised signing bonuses to attract the new workers it needs to assemble its products.
The first quarter is typically a lull for Apple and Foxconn, because most iPhone sales occur over the holiday season. But Foxconn’s supply chain turmoil coincided with the envisioned launch of Apple’s cheaper iPhone SE2, slated for launch as early as this month. On Tuesday, Liu deflected questions about the gadget, saying only that Foxconn’s product research and development efforts were proceeding.
MacDailyNews Take: Foxconn expecting iPhone factories to return to normal operations in a few weeks is very good news for Apple. As Apple CEO Tim Cook said last week: “It will take some time, but by and large, I think this is a temporary condition, not a long term of thing.”