Apple analyst Guo Mingyu sent a report to investors on Sunday warning them to keep a close eye on the outbreak of china’s coronavirus, which is affecting Foxconn, and other Apple suppliers, according tomedia. In his report, Mr. Guo outlined the situation of several major Apple suppliers at the time of the rework wave.
According to Mr Guo, Zhengzhou Foxconn is the most critical production plant for the iPhone 11 and the upcoming low-cost iPhone, which he expects to be subject to severe delays. Foxconn had planned to resume production on February 2, but it had been delayed for at least a week. Mr Guo expects the resumption of work to be about 40 to 60 per cent when the plant resumes.
Foxconn’s Shenzhen unit is focusing on the new iPhone in 2020, where the development team (30 percent of the total human resources) has no rest during the holiday season. Mr Guo said the plan had initially filled a gap in other people’s hands, but had been delayed by at least a week. The rate of return on labour is estimated at 30 to 50 per cent.
As a result of the delays at these plants, Foxconn has moved production equipment to Taiyuan and India, but the production capacity of these plants is limited.
A previous report showed that health officials shelved Foxconn’s plan to resume work after on-site inspections and found poor air circulation and the use of central air conditioners that increased the risk of infection. Officials in the Longhua district of Shenzhen, where Foxconn’s largest plant is located, said the report was untrue and was still being examined, according to an update from Reuters. Production at the Foxconn plant will resume after the inspection is completed, and Foxconn has submitted recommendations to prevent coronaviruses, including temperature checks, requiring employees to wear masks and implement a safe dining system.
Another Apple supplier and Soe resumed production of the iPhone 11 and the development of the new iPhone 12 at its Shanghai plant on February 3rd, with a 90 per cent pay-per-view rate, but Mr Guo believes the rate of pay will fall to 60 or 70 per cent because many factory workers will quit after receiving their salaries in February.
Hutchison’s plant in Kunshan, which produces a new low-cost iPhone, was due to resume production on February 10, but it has been “delayed for at least a few days” and has an estimated resumption rate of 40 to 60 per cent.
Mr. Guo declined to provide new shipment slots because “there are still a lot of uncertainties” but last week he predicted that iPhone shipments would fall 10 percent, or 36 million to 40 million, in the first quarter of 2020 because of the coronavirus.