Apple’s China supply to rev up
Tech giant’s suppliers in China to resume full production Monday despite the coronavirus outbreak.
Apple Inc.’s major suppliers in China, including iPhone-maker Hon Hai Precision Industry Co., plan to resume full-scale production in the country Monday, despite the coronavirus that has infected thousands and limited travel.
Foxconn’s Hon Hai, the most important manufacturer for Apple, said Tuesday that 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.
Although Chinese officials and companies have targeted Monday as the day to resume work in much of the country, 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 24,000 people have been infected with the virus and 493 have died.
Almost all of the world’s iPhones are made in China, primarily by Hon Hai at its so-called iPhone City in Zhengzhou and by Pegatron Corp. at an assembly site near Shanghai. Each location is more than 310 miles away from Wuhan in central China, the epicenter of the viral outbreak.
“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,” GF Securities analyst Jeff Pu said. Any potential labor shortage is a serious issue that weighs on the minds of suppliers, he said.
Apple said this week that it would close its corporate offices, stores and contact centers in mainland China through Sunday, out of an “abundance of caution and based on the latest advice from leading health experts.”
Last week, Apple reported holiday-quarter revenue that beat Wall Street expectations on rebounding iPhone demand, sending its shares to a record. It issued a forecast that was wider than usual because of uncertainty created by the spread of the virus.
Apple has about 10,000 direct employees in China, across its retail and corporate entities. Its supply chain also has more than 1 million workers manufacturing products such as the iPad, iPhone and Apple Watch.
