Hon Hai Precision Industry Co (鴻海精密) cut its revenue outlook for this year after deciding to impose strict quarantines at its main base for making iPhones, a measure to guard against the 2019 novel coronavirus outbreak that might hurt Apple Inc.
Hon Hai, which makes the vast majority of the world’s iPhones in Zhengzhou, China, officially resumes production on Monday next week after an extended Lunar New Year holiday.
However, workers returning from outside Henan Province — the site of its main factory — would be quarantined for 14 days, the company said in a statement, adding that any staff reporting to work who reside within the province would be isolated for seven days.
Photo: David Chang, EPA-EFE
The lost production prompted Hon Hai to slash its revenue growth forecast for this year.
The company is projecting a revenue increase of 1 to 3 percent this year, chairman Young Liu (劉揚偉) told Bloomberg News in a text message.
That is down from a Jan. 22 forecast of 3 to 5 percent growth — before the outbreak spread beyond China — and lags behind the 5.4 percent average of analysts’ projections.
“Given current market conditions, we are lowering to between 1 percent and 3 percent,” Liu said, when asked whether Hon Hai would cut its sales growth forecast for this year.
On Tuesday, Hon Hai said that it still expects to restart facilities throughout China on schedule next week, but it could take one to two weeks from then to resume full production due to the outbreak, a person with direct knowledge of the matter said.
The company has filed requests to reopen factories with Chinese authorities, the source said.
A full resumption is not possible until late this month because of various travel restrictions imposed to curb the virus, the source added.
“Roads are closed in some parts of the country. Nobody knows for sure if some workers could get back in time,” said the source, who described a “chaotic” situation in the company’s top management as it scrambles to meet different requirements for the resumption of operations set by various local governments across China.
“A full resumption will take at least one to two weeks from Feb. 10,” the person said.
The factory halt is set to hit Hon Hai’s profit for this year, but it was still evaluating the likely impact, the person said.
“Profit is definitely going to be hit, but as to how big the impact will be, we’re still calculating,” the person added.
Hon Hai, the world’s largest contract electronics manufacturer, is making plans to ensure the health and safety of its hundreds of thousands of workers, including scanning a QR code on employees’ mobile phones for health screening.
The company expects to use local workers as much as possible, while allowing time off for those who cannot travel long distances to get back to work, an internal document showed.
Hon Hai’s factories are dependent to a great extent on migrant workers from poorer regions.
“We will be very glad if the return rate could hit 30 percent [on Monday],” the source said.
Additional reporting by Reuters
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
CONCERNS: Tech companies investing in AI businesses that purchase their products have raised questions among investors that they are artificially propping up demand Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday said that the company would be participating in OpenAI’s latest funding round, describing it as potentially “the largest investment we’ve ever made.” “We will invest a great deal of money,” Huang told reporters while visiting Taipei. “I believe in OpenAI. The work that they do is incredible. They’re one of the most consequential companies of our time.” Huang did not say exactly how much Nvidia might contribute, but described the investment as “huge.” “Let Sam announce how much he’s going to raise — it’s for him to decide,” Huang said, referring to OpenAI
Nvidia Corp’s negotiations to invest as much as US$100 billion in OpenAI have broken down, the Wall Street Journal (WSJ) reported, exposing a potential rift between two of the most powerful companies in the artificial intelligence (AI) industry. The discussions stalled after some inside Nvidia expressed concerns about the transaction, the WSJ reported, citing unidentified people familiar with the deliberations. OpenAI makes the popular chatbot ChatGPT, while Nvidia dominates the market for AI processors that help develop such software. The companies announced the agreement in September last year, saying at the time that they had signed a letter of intent for a strategic
RSS