Apple supplier Foxconn said it expects its China-based production capacity to return to normal seasonal levels by the end of this month, as it steps up efforts to resume operations following the disruption due to the coronavirus.
In a call with investors on Tuesday, chairman Liu Young-way said that more than 50 per cent of the staff normally working at this time of year had returned to work.
The update comes as the world’s largest contract electronics manufacturer is pushing to bring production lines back into full service after local authorities in many parts of China have refocused from restricting movement to limiting economic damage.
The share price of Hon Hai Precision, the group’s Taiwan-listed flagship, has dropped 10 per cent since the start of the year amid fears that weeks of factory closures could cripple the global technology supply chain.
According to an employee at the Longhua campus in Shenzhen, one of the group’s largest plants, staff there are now working under intense pressure. “We’re currently working seven days a week. We’re really under the pump right now because of a shortage of factory workers,” the person told the Financial Times.
The labour shortage was created by various restrictions imposed by local and regional governments on the movement of people, trapping millions of migrant workers away from their jobs.
Foxconn said it could not yet estimate how the outbreak would influence its full-year financial performance, although it had warned last month that there would be a negative impact.
It did, however, forecast a double-digit percentage drop in revenue for the first quarter, saying that revenues from manufacturing consumer electronics products, enterprise products and computing products would fall more than 15 per cent compared with the previous quarter and the same period last year.
It gave a slightly less bearish outlook for revenue from component production and other business, which is forecast to drop more than 10 per cent.
But on a cautiously optimistic note, the company indicated that it expects the production disruption to delay rather than entirely derail operations. Judging from the current state of work, the second quarter could be like the first would be under normal circumstances, Mr Liu said.
Foxconn added that it had not seen the large-scale component shortages that have been rumoured in the industry, with Mr Liu only citing price rises for packaging materials because there were concerns that a jump in the production of surgical masks, which uses some of the same raw materials, could lead to a shortfall.