Foxconn moving iPhone production to combat coronavirus production loss, says Ming-Chi Kuo



 

Apple analyst Ming-Chi Kuo sees significant uncertainty surrounding iPhone production in China because of the ongoing coronavirus, and has detailed what he is seeing so far at Apple assemblers Foxconn and Pegatron.

iPhone 11 (left) and iPhone 11 Pro (right)

iPhone 11 (left) and iPhone 11 Pro (right)

In a note seen by AppleInsider Kuo believes that there is more than just issues surrounding Foxconn for Apple. Besides just Foxconn, Pegatron will have problems soon if they haven’t manifested already, and the entire supply chain has been shaken by the extended holiday ordered by the Chinese government.

Kuo believes that Apple’s Zhengzhou site is the most critical iPhone production site, and is responsible for the bulk of the iPhone 11 and iPhone 11 Pro assemblies. It isn’t clear when the factory will open, and Kuo thinks that the labor return rate will be between 40% and 60% of what the factory will need for full production.

Furthermore, the Shenzhen facility is impacted. Kuo sees most of the “iPhone 12” development there —but that team didn’t stop working. However, labor is impacted, with the return rate only being as high as 50% and possibly as low as 30% of pre-shutdown levels.

To hopefully deal with some of these problems, Kuo asserts that some production has been moved to India and Taiwan, but “capacities are limited” at those facilities.

Pegatron has two critical, and impacted, facilities. The first, Shanghai, resumed work on February 3, with a labor return rate of about 90%. But, Kuo is expecting resignations, lowering the workforce to about 60% after pay is doled out in February.

Kuo speculates that Pegatron’s Kunshan facility is in charge of “iPhone SE 2” production. The original start date for production was February 10, but that has since been postponed. The labor return rate is predicted to be between 40% and 60% of pre-holiday levels.





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