Well-known analyst Ming-Chi Kuo has published a new report to investors, warning of delays and focusing on Apple's suppliers, including Foxconn.
In the new report, Kuo notes that not only Foxconn is struggling with major production problems, but Pegatron is also having to deal with difficulties. Basically, the entire supply chain has been shaken by the extension of the holidays demanded by the Chinese government. At Foxconn's Zhengzhou site, which Kuo says is the most critical production site for the iPhone 11 and the upcoming low-cost iPhone (known as iPhone 9 / iPhone SE2), there are significant delays. The factory was originally scheduled to resume operations on February 2nd, but the entire process has been postponed for at least a week. The analyst believes that the return rate of workers when the plant reopens will be 40 to 60 percent of the level before the Lunar New Year holiday. The factory in Shenzhen, which focuses on "iPhone 2020" development, is also affected. The development team there, which makes up about 30 percent of the total workforce, is said to have worked even during the "holiday". The analyst believes that Foxconn has now relocated part of its production to Taiwan and India. However, the facilities there are very limited. In addition to Foxconn, Pegatron is also having to deal with problems.
False reporting causes panic
The manufacturer has two critical systems. While the plant in Shanghai resumed work on February 3rd with a return rate of around 90 percent, the plant in Kunshan remains closed. This was supposed to start on February 10th - but the date was postponed. But that's not all. Kuo assumes that some of the workers will quit. He also suspects that the new entry-level iPhone (known as iPhone 9 / iPhone SE) will also be manufactured in Kunshan. How exactly Pegatron will deal with this is not yet known. In the case of Foxconn, the company announced at the end of January that precautions were being taken to meet its production obligations. Foxconn has also taken steps to quarantine returning employees for up to two weeks to prevent further infections. According to a report by Nikkei Asian Review According to reports, a production ban was imposed by local officials, citing deficiencies in air flow and the use of central air conditioning. However, the authorities in question denied the report on Sunday – as Reuters reports.
No prognosis possible
According to the report, the inspection is still ongoing. As soon as the investigation is complete, Foxconn can resume work. However, workers must wear masks and undergo regular temperature checks. The food system will also be revised. In the wake of the warning, Kuo did not make a new forecast for iPhone sales. This is not possible at the moment because there are still too many uncertainties. However, supply bottlenecks can no longer be ruled out. (Photo by Smlyubov / Bigstockphoto)
