2317.TW - Hon Hai Precision Industry Co., Ltd.

Taiwan - Taiwan Delayed Price. Currency in TWD
83.40
-0.50 (-0.60%)
At close: 1:30PM CST
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Previous Close83.90
Open84.00
Bid0.00 x 0
Ask0.00 x 0
Day's Range83.00 - 84.30
52 Week Range70.10 - 97.20
Volume22,460,000
Avg. Volume32,230,915
Market Cap1.156T
Beta (5Y Monthly)0.59
PE Ratio (TTM)8.99
EPS (TTM)9.28
Earnings DateMar 27, 2020 - Apr 01, 2020
Forward Dividend & Yield4.00 (4.77%)
Ex-Dividend DateJul 25, 2019
1y Target Est88.95
  • Apple Outlook Cut Renews Questions About China Over-Reliance
    Bloomberg

    Apple Outlook Cut Renews Questions About China Over-Reliance

    (Bloomberg) -- For the second time in as many years, Apple Inc. has had to temper its sales outlook because of unexpected shifts in China, the country that’s served as the engine of its growth and success. First a trade war with the U.S. and now the outbreak of a novel coronavirus have called into question China’s role as a reliable market and supply chain partner for the world’s most valuable maker of consumer electronics.The coronavirus that’s stifled China’s meticulously orchestrated production and logistics has hit both Apple’s supply and demand -- factories are resuming work slower than expected, the company announced, and most of its 42 stores in the country lie dormant -- illustrating how heavily exposed its business is to disruptions in the world’s most populous country. A fall in sales within China is likely to be the most immediate impact this quarter, while widespread production bottlenecks there risk hurting global iPhone revenue in subsequent months.Amid its coronavirus troubles, Apple has been preparing to launch a new low-cost iPhone at around $400, Bloomberg News has reported. The model is still on track to launch in March, though the plans are still fluid, according to people familiar with the matter. Apple has also been preparing updated iPad Pro models with a new camera system for the first half of 2020 and the virus may yet impose delays or constraints on those plans.Apple Won’t Meet Quarterly Revenue Target Due to CoronavirusUpon joining the company in the late 1990s, Chief Executive Officer Tim Cook transformed Apple’s supply chain into the efficient juggernaut that’s been the longtime envy of the industry. Products are manufactured in China with the help of low-cost, but skilled, labor and shipped around the world in a matter of days. Relying on Taiwan’s Foxconn Technology Group to run on-the-ground operations and China’s abundant investment in transport to ensure logistics, Apple has become a trillion-dollar company largely by selling made-in-China iPhones, iPads, Macs and accessories.Responsible for millions of jobs in the country, Cook’s Apple has also garnered enough goodwill with the Chinese government to gain access to its market that is unmatched among U.S. tech heavyweights. Facebook Inc. and Alphabet Inc.’s Google are looking in from the outside, whereas Apple can sell all of its gadgets there. The Cupertino, California firm brings in more than $40 billion per year from Greater China, shy only of its takings from the U.S. and Europe. This strength is also the source of Apple’s vulnerability.On Monday, Apple cut its earnings guidance for the quarter ending Mar. 31, which was already wider than usual because of the unpredictability of the coronavirus fallout. U.S. stock index futures and shares in Apple suppliers from Japan to Hong Kong fell after the outlook warning kindled concerns about the damage the epidemic is causing global corporations and the Apple ecosystem. Last year, the company adjusted earnings because of a shortfall in iPhone demand in China, which it blamed in part on the ongoing trade war between Washington and Beijing.Production snarls at Apple’s main iPhone-making base of Zhengzhou may extend well into the June quarter and possibly beyond. Foxconn’s Hon Hai Precision Industry Co. only started seasonal recruitment on Monday, weeks behind schedule, and it’s been severely hindered by new policies intended to curb the spread of Covid-19 on campus. One recruiter, speaking on condition of anonymity, told Bloomberg News that the company was only hiring new workers from the local Zhengzhou area, tightening restrictions and eliminating the vast majority of available labor pool.Implementing a rolling quarantine of up to 14 days for returning workers from more distant provinces, Foxconn faces additional challenges in managing the movement of untold numbers of staff. In Shenzhen, as many as 10 workers are packed in each dorm room as they endure their assigned sequester period. The available beds are running short as a growing number of workers travel back, according to one person who helped arrange the program.‘Nightmare’ for Global Tech: Virus Fallout Is Just BeginningVirus contagion has shuttered plants across China for weeks longer than anticipated after the Lunar New Year break, and the nightmare scenario feared by Foxconn and its ilk is the infection spreading across factory floors, which could potentially freeze parts of the supply chain and trigger cascading shortages. Apple’s facilities have all reopened, said the U.S. firm, but evidence on the ground suggests they’re still far from fully operational.Existing iPhone inventories at retailers will soften the immediate blow of slower manufacturing, but analysts anticipate worldwide shortages will follow, extending the impact of the present disruption.“I expect we’re going to start seeing iPhone shortages outside of China, which plays into the guidance,” said Apple analyst Shannon Cross from Cross Research. “In theory, it shouldn’t be demand destructive. It should just mean there should be a larger backlog of demand when these issues are resolved.”The immediate reaction to Apple’s forecast cut has been a drag on Asian tech shares, especially those of suppliers to the company. But some impact on Apple was already widely anticipated.Tech Investors Jolted by Apple Pin Hopes on a Fast Turnaround“We’ve been getting nothing but headlines about the virus for weeks. Starbucks is closing its stores, Caterpillar is shutting its facilities. Company after company has been saying this,” Jim Paulsen, chief investment strategist at Leuthold Group, said by phone, expressing investor optimism for a fast turnaround. “We have been expecting bad sales headlines, this isn’t good, but it’s not surprising.” (Caterpillar closed its plants in China at the beginning of February at the direction of the Chinese government. It is re-opening them as the government allows; currently most are open.)Moving entirely out of China would be practically impossible for Apple in the short term, given the scale of its established network and the country’s incomparable ability to mobilize a workforce of millions. Similarly strong disruption threats to its supply chain arose in 2018 and 2019, largely spurred by trade war conflagrations, but Cook’s team has held steadfast in its commitment to the region and hasn’t shown any significant momentum toward a major move out.“Apple’s supply chain in China is so tight and large, it would be difficult to replicate outside the region,” Cross said. “I think you’ll continue to see small expansions into India, but the vast majority of production will remain in China.”Apple has indicated that its overall business is still strong, saying that it remained on track revenue-wise in regions outside of China for both products and services. The company is engaged in a long-term diversification shift that’s seen it pour billions of dollars into creating its own streaming content for Apple TV+ and building out subscription services like Apple Music and Apple Arcade. Its strongest step to reduce its China dependence to date has been this move to be less reliant on pure hardware sales for the bulk of its revenue.Addressing the wider smartphone industry in China, Strategy Analytics this month projected a significant hit to shipments in the first half of 2020, to be followed by a recovery and a slight increase in shipments in the closing months of the year. If Apple follows a similar trajectory, it could see iPhone demand shift into later quarters rather than vanishing entirely.“I think Apple remains in a very good position long-term,” Cross said. “I would assume there would be some pressure on the stock, but assuming this is a short term bump in the road, investors will look through it.”(Updates with comment from Caterpillar in 13th paragraph.)\--With assistance from Joe Deaux.To contact the reporters on this story: Mark Gurman in Los Angeles at mgurman1@bloomberg.net;Debby Wu in Taipei at dwu278@bloomberg.net;Gao Yuan in Beijing at ygao199@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Vlad Savov, Edwin ChanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Financial Times

    Coronavirus hits return to work at Apple’s biggest iPhone plant

    Apple’s biggest iPhone plant is struggling to return to full production after China’s new year holiday because of restrictions on movement caused by the coronavirus, adding to concerns that the outbreak will have a lasting effect on the US company. Contract manufacturer Foxconn assembles many of Apple’s iPhones at a huge factory complex at Zhengzhou employing more than 200,000 workers in China’s Henan province.

  • Reuters

    SoftBank spends $2.5 bln to get second Vision Fund off the ground -sources

    SoftBank Group Corp has pumped $2.5 billion of its own cash into new investments since October, people familiar with the matter said, hoping to restore its money-making credentials as it courts investors for a successor to its Vision Fund. The Japanese technology conglomerate is also considering investing another $2.5 billion of its own money, one of the people said. SoftBank Chief Executive Masayoshi Son said last week the company may spend up to two years investing its own money in a bridge fund, to build a portfolio that will give investors enough confidence to participate in a second Vision Fund.

  • Apple's Virus Cut Puts All Eyes on Tech Bellwether
    Bloomberg

    Apple's Virus Cut Puts All Eyes on Tech Bellwether

    (Bloomberg Opinion) -- Apple Inc. has thrown out its March-quarter revenue guidance three weeks after providing it.Despite factoring in possible downside from the China coronavirus outbreak in its original forecast, the iPhone maker realized that things have deteriorated much more than it had anticipated. It gave no new figure and merely said the old one no longer applies, an admission that the company really can’t quantify the impact.While we should expect similar downbeat tones through the rest of the sector, this really means we should keep tabs on the one company that sits at the heart of the global technology supply chain: Taiwan Semiconductor Manufacturing Co.Apple is TSMC’s largest customer. When the chipmaker gave its own first-quarter and full-year forecasts Jan. 16, the world had barely heard of the disease now riveting its attention.Since then, Apple has shut stores in China and downstream assemblers like Hon Hai Precision Industry Co. have struggled to ramp up production after the Lunar New Year break amid continuing quarantines and a shortage of workers willing to return to the factory floor.Nvidia Corp., which designs graphics chips, is another major client of TSMC. On Feb. 13, it said the virus had cut its forecast by $100 million. That’s only around 3% of expected revenue for the quarter, but it all eventually adds up. Alibaba Group Holding Ltd., not a direct customer, forecast a decline in revenue from its core businesses as consumers on its e-commerce platform shy away from spending. At least some of those lost sales will be electronics products, which use chips made by TSMC.Chinese companies, including Huawei Technologies Co., accounted for 20% of TSMC’s revenue last year. With numerous enterprises in China on lockdown, adding to the squeeze on both demand and production, it’s unlikely such clients will be able to escape the impact.And last week, wireless industry association GSMA scrapped its annual Mobile World Congress scheduled for Feb. 24 in Barcelona because most of its major participants had already pulled out. This isn’t a consumer event, but the cancellation shows the breadth and reach of the outbreak’s impact on business. Whichever way you look at it, the global tech slowdown leads back to TSMC. Revising guidance mid-quarter isn’t without precedent, and TSMC usually does with a statement filed mid-afternoon Taipei time. It did so a year ago this week, cutting its sales and profit outlook after facing troubles with chemicals used in the manufacturing process. The result was a 10% reduction in operating profit. Just a few months before that, a production hiccup caused by a computer virus in its equipment hurt gross profit by around 5%. An earthquake four years ago sliced operating income by about 7%. The biggest mid-quarter guidance cut I could find is the 25% hit to operating profit that it took in December 2008 as the financial crisis brought the world economy to a halt.To be sure, it’s not certain that a cut will be necessary this time. Clients may decide that they want to keep building up inventory of the chips that come out of TSMC’s factories. But at some point, end-demand may dictate a more cautious approach to procurement. This epidemic is proving hard to quantify, so TSMC’s biggest challenge may not be whether to revise guidance, but what new number to give. To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Foxconn says recent Reuters reports on factory resumption in China were not factual
    Reuters

    Foxconn says recent Reuters reports on factory resumption in China were not factual

    Taiwan's Foxconn said on Thursday that recent Reuters reports on its plant resumption plans in China were not factual. Foxconn made the comment in a statement to the Taipei stock exchange, without elaborating on its production status. The world's largest contract electronics maker, formally Hon Hai Precision Industry Co Ltd, is a supplier to tech giant Apple Inc and others.

  • Reuters

    RPT-Softbank's Vision Fund 2 stalls as key backers opt out

    DUBAI/RIYADH, Feb 12 (Reuters) - Big investors who are critical to SoftBank Group's plans for a second massive technology investment fund are refusing to take part unless the first $100 billion Vision Fund can turn around its performance, sources familiar with the talks told Reuters. SoftBank chairman Masayoshi Son on Wednesday acknowledged the lack of commitments for Vision Fund 2, but vowed to forge ahead with his investment strategy using SoftBank money. The first Vision Fund lost $2.5 billion in the quarter ended December, SoftBank reported Wednesday, largely as a result of a disastrous bet on office-sharing company WeWork.

  • Foxconn aims to resume half of output in virus-hit China by month-end - source
    Reuters

    Foxconn aims to resume half of output in virus-hit China by month-end - source

    Taiwan's Foxconn hopes to resume half of its production in China by month-end, a source told Reuters on Wednesday, as the supplier to tech giant Apple and others reopens plants shut over a coronavirus outbreak. The world's largest contract electronics maker also aims to resume 80% of production in China in March, added the source, who has direct knowledge of the matter, citing internal targets set by Chairman Liu Young-Way. Foxconn's reopenings after the Lunar New Year holiday were delayed by the rapid spread of the virus in China, which has killed more than 1,100 people, as the World Health Organization warned against a global threat potentially worse than terrorism.

  • Foxconn aims to resume half of output in virus-hit China by month-end: source
    Reuters

    Foxconn aims to resume half of output in virus-hit China by month-end: source

    Taiwan's Foxconn hopes to resume half of its production in China by month-end, a source told Reuters on Wednesday, as the supplier to tech giant Apple and others reopens plants shut over a coronavirus outbreak. The world's largest contract electronics maker also aims to resume 80% of production in China in March, added the source, who has direct knowledge of the matter, citing internal targets set by Chairman Liu Young-Way. Foxconn's reopenings after the Lunar New Year holiday were delayed by the rapid spread of the virus in China, which has killed more than 1,100 people, as the World Health Organization warned against a global threat potentially worse than terrorism.

  • Bloomberg

    Coronavirus Stokes Mask Production and Mass Confusion

    (Bloomberg Opinion) -- For factories to reopen, people to get back to work and the coronavirus to stop spreading, China needs tens of millions of face masks each day. And yet the country’s sprawling bureaucracy is sending out mixed messages about its ability to provide them. The repercussions have been felt even in Hong Kong, where throngs of panicked shoppers cleared the shelves of masks and, more perplexingly, toilet paper last week.The world’s biggest mask producer is facing a severe shortage. Even running at full capacity, China can make only 20 million a day, nowhere close to meeting the needs of the 776 million who are slowly returning to work. As for prized surgical and N95 masks (which provide even more coverage), China can produce only about 2.2 million and 600,000 daily. The country has roughly 12 million medical professionals.In the last week of January, China had to purchase more than 56 million masks from overseas, the government said. Apple supplier Hon Hai Precision Industry Co. took matters into its own hands when it started to make masks for employees at its flagship factory in Shenzhen. Once again, China’s bureaucrats have proven their incompetence, starting with the government of Hubei province, whose slow response accelerated the viral spread in the first place.Even under lockdown, Hubei of all provinces shouldn’t be this short of protective medical gear. Xiantao, a provincial city there, is a major industrial hub for the non-woven products used in surgical masks. But last week, local officials told producers that unless their goods have been cleared for sale within China, factories can’t reopen until Feb. 14. This has created a social uproar. Many of these masks aren’t cleared for sale in the mainland because they’re exported. These businesses often lack domestic licenses precisely for this reason. Within days, the provincial government had to reverse course, because the proposed regulation would have shut downroughly half of Xiantao’s production capacity. In the manufacturing hub of Guangdong, meanwhile, officials went into overdrive, encouraging local businesses to switch to mask production by offering generous subsidies. Companies that purchased production lines and got online by Feb. 7 received as much as 80% in rebates from the government; those meeting a Feb. 20 deadline can have up to half of their equipment costs paid for. It's no surprise that companies are now making masks, including automakers such as BYD Co. and Guangzhou Automobile Group Co. But this shift has stoked its own form of panic. When China's fourth-largest tissue-paper brand, Guangdong-based C&S Paper Co., said it purchased five production lines with a daily capacity of about 350,000 masks, speculation was rife on social media about possible disruption to the paper-goods supply chain. This helps explain why Hong Kong had a toilet-paper run last week: The likes of C&S might just be too busy making surgical masks.Judging by how well the stock market is doing, it seems global investors have learned to forgive China. Many have argued that, of all countries, China with its centralized command system can weather this epidemic better than others.The reality is a lot murkier. We have one province so bogged down by licensing issues that its much-needed factories are lying fallow; another whose overly generous subsidies could be providing the wrong incentives and inadvertently stoking consumer panic. As it turns out, China’s bureaucracy is a lot less efficient than we imagined. Don’t be surprised if we see a diaper run, too. Even those manufacturers have switched to making masks.  To contact the author of this story: Shuli Ren at sren38@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Financial Times

    Foxconn recalls workers in phases following coronavirus shutdown

    Foxconn, the maker of Apple’s iPhone, is recalling its factory workers in phases to its assembly lines as China struggles to revive the world’s second-largest economy from the paralysis wrought by the spread of the coronavirus. Analysts warned that China’s prolonged shutdown, which started three weeks ago with the quarantine of Wuhan — the city at the centre of the outbreak — could delay the launch of Apple’s next iPhone, planned for March. Most of China officially returned to work on Monday, but the scale of the resumption has varied.

  • Asian Shares Boosted by Easing Concerns Over Coronavirus but China Production Worries Remain
    FX Empire

    Asian Shares Boosted by Easing Concerns Over Coronavirus but China Production Worries Remain

    Uncertainty about work resuming at factories in China is setting in, with provinces or cities posting different dates for an extended shutdown as the coronavirus outbreak continues to spread.

  • Foxconn Resumes Some Production at Its Main China iPhone Site
    Bloomberg

    Foxconn Resumes Some Production at Its Main China iPhone Site

    (Bloomberg) -- Foxconn Technology Group resumed some production Monday at its main iPhone-making site in Zhengzhou, according to local officials, though it was unclear how many workers returned, highlighting the ongoing uncertainties the global tech supply chain faces amid the coronavirus outbreak.Henan Governor Yin Hong inspected the site on Monday to assess the company’s virus-prevention measures as workers went back to work after an extended holiday, according to the Chinese Communist Party city committee in Zhengzhou.Yet just the day before, Foxconn told some workers that it was postponing the resumption of production and wouldn’t be able to decide on a back-to-work date for the site “until further notice,” according to a version of an internal message reviewed by Bloomberg News. The site is one of many run by the iDPBG business unit, which makes gadgets for Apple Inc. at a factory in Zhengzhou in central China and two other plants in Shenzhen. It’s not clear how many employees received the message and whether other workers were summoned back.Foxconn, also known as Hon Hai Precision Industry Co., declined to comment on the message and said on Monday its factories will comply with government requirements and resume output in an “orderly manner” by staggering the return of workers.The rapid change in developments highlights the fluidity in responses by local governments and companies as they seek to contain the coronavirus while minimizing economic impact. Foxconn has told employees at its southern Shenzhen headquarters not to return to work after the extended Lunar New Year break ended Feb. 10, according to a memo obtained by Bloomberg.Not all of its employees returned to their hometowns for the holiday break so there are still some available workers on production sites, according to people familiar with the plant operations, though it’s unclear how many.The unit could also struggle to hire back workers after the holiday period. A recruitment app for iDPBG shows that two of its plants in Shenzhen had received only 800 applications from former workers as of Monday morning. The facilities are seeking as many as 3,000 ex-workers.Apple and Foxconn were among the first corporations to try and quantify the epidemic’s impact. Hon Hai slashed its 2020 outlook last week, anticipating disruptions to Apple’s carefully calibrated production chain as well as weaker consumer demand and overall economic growth. As China’s largest private employer and a key partner to many of the world’s most recognizable consumer brands, Foxconn has become a high-profile symbol of how the outbreak is disrupting Chinese manufacturing and the world’s supply of electronics.To contact Bloomberg News staff for this story: Gao Yuan in Beijing at ygao199@bloomberg.net;Debby Wu in Taipei at dwu278@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • ‘Nightmare’ for Global Tech: Virus Fallout Is Just Beginning
    Bloomberg

    ‘Nightmare’ for Global Tech: Virus Fallout Is Just Beginning

    (Bloomberg) -- Chinese-based manufacturers began to restart factories Monday, but no one knows for sure when they’ll be back at full-speed -- or what sort of chaos may ensue.Foxconn, which makes the majority of the world’s iPhones in Zhengzhou, a few hundred miles from the epicenter of the coronavirus outbreak, resumed some production on Monday but it wasn’t clear how many workers returned to the factory. On Sunday, the company told some employees that it was postponing resuming production and sent a sent an internal message saying that it wouldn’t be able to decide on a back-to-work date “until further notice” for its iDPBG business unit, which makes gadgets for Apple Inc., according to a version reviewed by Bloomberg News.Last week, Foxconn took the unprecedented step of telling workers to stay away from its Shenzhen headquarters until further notice as government inspectors vet its containment procedures, Bloomberg News reported. Apple’s most important partner warned investors of the daunting task of securing enough workers despite widespread transport blockades, quarantining thousands, and the “nightmare” scenario of an on-campus epidemic that could shut down production altogether.“How we can make sure there will be no infection within our campuses will be the first priority, because if you put a lot of people together and one of them gets infected, that will be a nightmare,” Foxconn investor relations chief Alex Yang told investors on a Thursday call, according to a recording obtained by Bloomberg News. “We try very hard to make sure the possibility of any on-site infection will be as low as zero, although it will be challenging.”Read more:Foxconn Delays Return of Workers to Main China iPhone PlantsThe deadly virus has illustrated the increasingly central role China plays in global manufacturing, from clothing and chemicals to automobiles and especially technology. Just about every major piece of consumer electronics is made in China, from iPhones and gaming consoles to half the world’s liquid crystal display or LCD screens. The contagion has already shuttered plants across China for a week longer than anticipated after the Lunar New Year break -- a disruption that could get much worse if rolling quarantines and suspended rail and air links prevent the return of the millions of blue-collar laborers at the heart of electronics assembly.When they do make it back, untold numbers will get funneled into a quarantine of up to two weeks -- a sequester of unknown scale. Any disruptions at Chinese plants can, in a worst-case scenario, freeze parts of the supply chain by triggering cascading shortages. Influential supply chain analyst Kuo Ming-chi of TF International estimates Foxconn’s main iPhone-making base will properly resume work only next week -- and then at 40% to 60% capacity. Citigroup estimates just 30% of the entire Chinese semiconductor workforce will return to their workplaces on Feb. 11.Foxconn said in a statement Saturday it’s working with local governments to prepare for the return of employees, without specifics. Shenzhen’s Longhua district said in a WeChat post it was helping the Taiwanese company fine-tune its plans. “To safeguard everyone’s health and safety and comply with government virus prevention measures, we urge you not to return to Shenzhen,” Foxconn wrote in a Feb. 5 text message to employees based in the southern city. “As for the happy reunion date in Shenzhen, please wait for further notice.”Apple slipped 0.6% to $318.19 in New York Monday. Foxconn declined 1.1% in Tapiei.On last week’s call, Yang spoke in depth about Foxconn’s virus-prevention measures and the need to comply with various regulations in the so-called “iPhone city” of Zhengzhou -- just 300 miles from Wuhan, the origin of the outbreak -- covering infection-fighting measures from quarantines to face mask and hand sanitizer inventories. “If you are talking about tens of thousands of people in a line, in a building, in a campus and we try to prevent a virus -- and in the meantime you are asking for them to do their normal job -- that’s very challenging.”Apple and Foxconn, known also as Hon Hai Precision Industry Co., were among the first corporations to try and quantify the viral epidemic’s impact. Hon Hai slashed its 2020 outlook last week, anticipating disruptions to Apple’s carefully calibrated production chain centered on China, as well as dampening consumer demand and overall economic growth. As China’s largest private employer and a key partner to many of the world’s most recognizable consumer brands, the Taiwanese company has become a high-profile symbol of how the outbreak could disrupt Chinese manufacturing and hence the world’s supply of electronics.The disruptions extend well beyond electronics or technology. Many auto plants in the world’s largest market remain idled. Toyota Motor Corp., which initially halted its Chinese plants until Feb. 9, said Friday it now plans to resume production as soon as Feb. 17. Honda Motor Co. said it will reopen its factory in Hubei on Feb. 14 with an eye toward restarting output the week of Feb. 17. And Volkswagen AG also delayed the resumption of production at some of its Chinese businesses until Feb. 17.Expect the “supply chain situation to get worse before getting better,” wrote Jeff Pu of GF Securities.What Bloomberg Intelligence Says:Hon Hai, ZTE and Quanta may not recover as quickly as electronics makers did after the SARS outbreak. China’s growth may slow further and 5G phone sales could disappoint as they don’t seem to have the features that drive widespread consumer upgrades.\- Charles Shum, BI technology analystClick here for the researchOne thing in the industry’s favor is that the first half of the year is often a lull period for a consumer electronics sphere driven by holiday sales and new iPhones in the fall. Yang stressed that the disruption was “manageable” and that Hon Hai would scramble to make up for any early 2020 production shortfall.Several of the biggest names in tech including Sony Corp. and Samsung Electronics Co. have said they’ll restart production in China as scheduled. Production at Tesla Inc.’s new Shanghai factory -- its first outside the U.S. -- resumed on Feb. 10., it said. And Apple-assembler Pegatron Corp. on Monday said it’s gradually restarting operations.But much depends on the extent and severity of the outbreak. Even if it peaks soon, the interconnectedness of just-in-time global supply means the entire system will go through an unprecedented upheaval. The shortage of just one component exerts a ripple effect on the entire chain by holding up production further down the line, rippling through the carefully choreographed networks that companies from Apple to Huawei Technologies Co. and display-maker BOE Technology Group Co. rely on.“There will certainly be risks of on-site infections. Companies also do not have control over neighborhoods near their factories,” said Eric Tseng, chief executive officer of Taipei-based Isaiah Research. “Manpower levels for most manufacturers will still be low during the first two to three weeks of February due to the length of quarantines and the possibility that not many workers will return.”If Supply Chain Must Face a Pandemic, Now’s the Time: Tim CulpanUnlike in previous years, Foxconn hasn’t even begun the recruitment of the hundreds of thousands it employs annually to piece together gadgets like the Sony Corp. PlayStation and HP Inc. computers, according to people familiar with the matter. Local executives were awaiting clarity and trying to reconcile rapid-fire and sometimes conflicting virus-prevention measures announced by local governments.As such, its main iPhone-making plant in Zhengzhou may start the week of Feb. 10 with just a small number of workers who didn’t decamp for their hometowns before the extended break, one of the people said. The majority of the plant’s workforce are expected to encounter immense travel obstacles, the person added, asking not to be identified talking about internal matters. Foxconn’s two biggest campuses in Shenzhen now also face a similar predicament given the warning to employees to stay away.To make matters worse, the virus has shrunk the available labor pool. Foxconn will temporarily halt recruiting workers from Hubei, site of the outbreak’s epicenter in Wuhan, and other heavily affected areas in neighboring provinces, a second person said. It’s ordered workers currently in Hubei as well as from seven other cities in adjacent Henan, Zhejiang and Jiangsu provinces not to return to work, according to an internal document dated Feb. 4. obtained by Bloomberg. The company offered a 200 yuan ($28) reward to employees who report on co-workers violating that ban. While the picture remains murky, Foxconn is the most visible proxy for the confusion that now grips the broader supply chain.More broadly, economists are still struggling to tote up the economic fallout of the outbreak. While SARS was bad economic news for China and its neighbors, which suffered from weaker exports and falling tourism, China’s small weight capped the global impact back then, when China’s GDP was 4% of the global total. That share now stands at 17%. That means, even if the outbreak peaks soon and producers impose double overtime to make up for lost production, the final end-demand in 2020 for gadgets of all stripes could take a severe beating.At Huawei, China’s largest tech company and a global leader in smartphones and networking gear, executives are debating when to resume production for fear of angering Beijing by forcing large numbers of people into cramped dorms and factories, according to another person familiar with the matter. Then there’s the LCD makers from BOE to Tianma Microelectronics Co. that now crank out 50% or more of the screens for all TVs, phones and even car dashboards -- much of that from Wuhan.The city is an important base for FiberHome and other optical fiber makers as well, that Huawei and networking firms rely on. “These will get directly hit,” said Kevin Chen, an analyst at China Merchants Securities. “ Near-term, their production will be impacted even if they resume working they might have a problem getting enough workers resulting in lower utilization.”Read more: China Coronavirus Cloud Hangs Over Apple’s Resurgence(Updates with Foxconn resuming some production in second paragraph.)\--With assistance from Ishika Mookerjee, Christopher Anstey, Sohee Kim, Chunying Zhang, Tian Ying, Vlad Savov and Colum Murphy.To contact the reporters on this story: Debby Wu in Taipei at dwu278@bloomberg.net;Gao Yuan in Beijing at ygao199@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Reuters

    Apple iPhone maker Foxconn approved to resume Shenzhen plant production -source

    Apple iPhone maker Foxconn has received Chinese government approval to resume production at a key plant in the southern city of Shenzhen, a source with direct knowledge of the situation told Reuters late on Monday. About 20,000 people, or roughly 10% of Foxconn's workforce in Shenzhen, had returned to the plant as of Monday, the source said, adding that the company told some of its employees there late on Monday to return to work the next day. Foxconn, formally Hon Hai Precision Industry Co Ltd, makes smartphones for global vendors including Apple.

  • US STOCKS-Wall Street set for subdued open as investors weigh coronavirus risks
    Reuters

    US STOCKS-Wall Street set for subdued open as investors weigh coronavirus risks

    Wall Street was set to open largely unchanged on Monday after last week's strong gains as investors kept an eye on the economic impact from the coronavirus outbreak and company updates, with people starting to return to work in China. The death toll from the epidemic has surpassed that of Severe Acute Respiratory Syndrome (SARS) from 2002-2003 and the World Health Organization said the number of cases outside China could be just "the tip of the iceberg". "Investors are quiet worried about the overly negative impact of the coronavirus on the global economy," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

  • Apple's main iPhone maker Foxconn to resume some Chinese production: source
    Reuters

    Apple's main iPhone maker Foxconn to resume some Chinese production: source

    Apple's main iPhone maker Foxconn got the green light on Monday to reopen two major plants in China closed because of the coronavirus and aims to resume production even though only 10% of the workforce has returned so far, a source told Reuters. Foxconn, the world's largest contract electronics maker, got approval to resume work at factories in the eastern central Chinese city of Zhengzhou and in the southern manufacturing hub Shenzhen, the person with direct knowledge of the matter said. The two factories together make up the bulk of Foxconn's assembly lines for Apple's iPhones and any further delays to production following the enforced closures are likely to hit global shipments.

  • Reuters

    US STOCKS-Futures tread water as investors weigh coronavirus impact

    U.S. stock index futures were flat on Monday after Wall Street's rise last week, with investors monitoring the economic impact of the coronavirus outbreak and company updates as workers returned to work in China. The death toll from the epidemic has now surpassed that of Severe Acute Respiratory Syndrome (SARS) from 2002-2003 and the World Health Organization said the number of cases outside China could be just "the tip of the iceberg". Apple Inc slipped 0.9% in premarket trading as its supplier Foxconn struggled to fully resume its factories in China.

  • TheStreet.com

    Apple Supplier Foxconn to Remain Closed Amid Coronavirus Outbreak

    Operations within Apple iPhone maker Foxconn will remain closed 'until further notice,' another sign the coronavirus is hurting the Chinese and global economies.

  • Apple's main iPhone maker Foxconn to resume some Chinese production - source
    Reuters

    Apple's main iPhone maker Foxconn to resume some Chinese production - source

    Apple's main iPhone maker Foxconn got the green light on Monday to reopen two major plants in China closed because of the coronavirus and aims to resume production even though only 10% of the workforce has returned so far, a source told Reuters. Foxconn, the world's largest contract electronics maker, got approval to resume work at factories in the eastern central Chinese city of Zhengzhou and in the southern manufacturing hub Shenzhen, the person with direct knowledge of the matter said. The two factories together make up the bulk of Foxconn's assembly lines for Apple's iPhones and any further delays to production following the enforced closures are likely to hit global shipments.