Resumption of production at Hon Hai Precision Industry Co’s (鴻海精密) factories in China has “exceeded expectations” after a prolonged halt as the COVID-19 pandemic disrupted supply chains, founder Terry Gou (郭台銘) said yesterday.
Hon Hai, the world’s largest contract electronics maker and Apple Inc’s major manufacturing partner, bases most of its production in China, where many of its suppliers are, and as a consequence was hit hard by coronavirus-related curbs that have hurt demand and upended supply chains globally.
The company, known internationally as Foxconn Technology Group (富士康科技集團), in February suffered its biggest monthly drop in revenue in about seven years as the pandemic played havoc with its business.
Photo: Reuters
Hon Hai’s revenue is expected to drop 15 percent this quarter, the company said last week.
The return to work at Hon Hai’s factories in China has “exceeded our expectations and imagination,” Gou told reporters in Taipei, adding that supplies to its factories there and in Vietnam have returned to normal.
However, weak consumer demand would result from the coronavirus pandemic, especially in the US market, Gou said.
“In the United States, what we are worried about is the market. If production is resumed quickly, but consumers stop spending ... that will be key to the economic recovery,” he said.
Apple, Hon Hai’s top client, rescinded its quarter sales guidance for this month, citing a slower ramp up of manufacturing in China after travel restrictions and an extended Lunar New Year holiday.
Gou said that he has “concerns” over the electronics supply chain in Japan and South Korea, which are grappling with their own serious outbreaks of the virus, and cited rising prices for DRAM memory and supply issues with display panels, without elaborating.
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