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Kuo Warns of Delays and Low Labor Return Rates at Apple Supplier Factories in China Due to Coronavirus

Kuo Warns of Delays and Low Labor Return Rates at Apple Supplier Factories in China Due to Coronavirus

Apple analyst Ming-Chi Kuo right this moment despatched out a notice to buyers warning them to pay shut consideration to the epidemic adjustments of the coronavirus outbreak in China as it’s impacting Foxconn, Pegatron, and different Apple suppliers.

In the notice, Kuo outlines the standing of a number of main Apple suppliers as staff put together to return to factories to resume manufacturing on Apple merchandise.


Foxconn’s Zhengzhou web site, which Kuo says is essentially the most essential manufacturing web site for the iPhone 11 and the upcoming low-cost iPhone, is seeing important delays. Foxconn initially deliberate to resume work on February 2, however that has been postponed by at least one week. Kuo estimates that the labor return price will probably be 40 to 60 % of what it was prior to the Lunar New Year vacation when the power reopens.

Work at Foxconn’s Shenzhen location focuses on the brand new 2020 iPhones, and the event workforce there, which accounts for 30 % of complete manpower, didn’t take a break throughout the vacation. Kuo says the plan initially stuffed different manpower gaps, however it has been postponed for at least every week. Labor return charges are estimated at 30 to 50 %.

Foxconn has moved manufacturing gear to its websites in Taiyuan and India as a result of of the delays in China, however manufacturing capacities are restricted in these areas.

A report yesterday steered that Chinese well being officers had denied Foxconn’s plans to reopen its factories after conducting on-site inspections and discovering fault with poor airflow and the use of central air-con, however Chinese authorities in an announcement right this moment mentioned that they’d not blocked Foxconn from resuming manufacturing.

According to new data from Reuters, officers in Shenzhen’s Longhua district the place Foxconn’s largest manufacturing unit is situated mentioned that the report was unfaithful and that it was nonetheless conducting checks. Production at Foxconn amenities will restart when inspections have been accomplished, and Foxconn has submitted coronavirus prevention proposals that embody temperature checks, requiring workers to carrying masks, and implementing a secure eating system.

Pegatron, one other Apple provider, resumed work on ‌iPhone 11‌ manufacturing and new iPhone 12 improvement at its Shanghai manufacturing unit on February three, with a labor return price of 90 %, however Kuo believes that the labor price will fall to 60 or 70 % as a result of many manufacturing unit workers will resign after they receives a commission in February.

Pegatron’s Kunshan manufacturing unit in cost of manufacturing on the brand new low-cost ‌iPhone‌ was meant to return to work on February 10, however that has been postponed “at least several days” with an estimated labor return price of 40 to 60 % when it reopens.

Kuo declined to present new cargo forecasts as a result of “there are still many uncertainties,” however final week he lowered his iPhone cargo forecast by 10 % to 36 to 40 million models throughout Q1 2020 due to the coronavirus.

Depending on when Apple’s provider factories reopen, there may very well be a big impression on gadget provides ensuing in longer transport and wait instances for brand new gadgets and potential delays for gadgets rumored to be to launching early in the yr just like the low-cost ‌iPhone‌.

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