Coronavirus: iPhone Output Expected to Be Affected if China Extends Foxconn Factory Halt

Foxconn has so far seen a “fairly small impact” from the outbreak

HIGHLIGHTS
  • Foxconn is the world’s largest contract electronics maker
  • Companies were told to shut until at least February 10
  • Foxconn has halted “almost all” of its production in China

Foxconn could see a “big” production impact and shipments to customers including Apple face disruption if a Chinese factory halt due to the coronavirus outbreak extends into a second week, a person with direct knowledge of the matter said.

Taiwan’s Foxconn, which makes smartphones for Apple and other brands, has halted “almost all” of its production in China after companies were told to shut until at least February 10, the source said, adding that an extension of the stoppage could disrupt shipments to clients including Apple.

Taipei-based Foxconn, which is the world’s largest contract electronics maker, did not immediately respond to a request for comment, while Apple declined to comment.

The source told Reuters on Monday that Foxconn has so far seen a “fairly small impact” from the outbreak as it was utilizing factories in countries including Vietnam, India, and Mexico to fill the gap, adding that the company will be able to make up for the delay if factories work overtime after the ban.

In Eastern China’s Suzhou, one of its largest manufacturing hubs, companies have been told to stay shut until at least February 8 and in Shanghai until February 9. Factories in the southern manufacturing hub of Dongguan in export-oriented Guangdong province have also been told not to open before February 10.

The outbreak of coronavirus, which the World Health Organization declared a global health emergency, threatens to disrupt swathes of Chinese manufacturing.

The source said a halt beyond February 10 could disrupt Foxconn’s shipments, highlighting concerns about production hubs in the southern province of Guangdong and the city of Zhengzhou in Henan province where key iPhone plants are located.

“What we are worried about is delays for another week or even another month. The impact would be big,” the source 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 February 10)…It’s up to the instructions given by central and provincial governments.”