Foxconn Warns Of Major Revenue Drop, Expects Full Production By End March 

Apple’s top supplier Foxconn warned on Tuesday that consumer electronics and enterprise product revenue would decline by 15% in the first quarter, but a rebound in business activity could be seen shortly after that, as full production targets have now been set for the end of March, reported Reuters. 

Foxconn has been one of the hardest-hit manufacturers in China, still operating at 50% capacity as a slow ramp of its factories has been underway amid factory shutdowns because of the Covid-19 outbreak last month.

The company told investors they shouldn’t expect revenue growth in the first half and a “mild downward revision” from the original guidance of “slight growth” projected earlier this year. Its new guidance said the virus impact of its Chinese operations would be short term and full production could resume by the end of the month. 

“Prevention of outbreak, resumption of work and production are our top priority,” Foxconn’s Chairman Liu Young-Way told investors on Tuesday.

As readers recall, Foxconn originally had plans to restart production around February 10-12, with full production by the start of March. Still, those production targets have been off by about a month as much of China’s economy remains shuttered for virus containment purposes. 

Foxconn’s supply chain shock led to Apple last month admitting it does “not expect to meet the revenue guidance we provided for the March quarter” due to virus related issues.

Foxconn’s crippled supply chain in China has led to iPhone disruption in India. There’s even the risk of iPhone and Airpod shortages in the US if factory shutdowns in China persist. Apple could find itself rescheduling new product launches this year. 

Foxconn, already dealing with a supply shock, could also be hit with a demand shock as China’s mobile phone industry crashed the most on record in January.