Hon Hai’s iPhone plant remains in high-risk area - 台北時報

POTENTIAL FOR DANGER: In a worst-case scenario, Hon Hai could look a 20 percent shortfall successful expected income this 4th owed to the lockdowns, analysts said

• Bloomberg

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The world’s biggest iPhone mill would proceed to beryllium taxable to COVID-19 restrictions, aft authorities successful China lifted a lockdown successful the territory wherever the works is located, but said immoderate areas were inactive regarded arsenic precocious risk.

Zhengzhou ended a district-level lockdown bid for the country astir the airport, the authorities said successful a connection yesterday.

Still, respective areas wrong that territory are to stay classified arsenic “high risk,” which nether the city’s COVID-19 rules means they would proceed to beryllium taxable to lockdown-like curbs. That includes restrictions connected radical leaving their homes.

The database of high-risk areas encompasses the Foxconn Technology Group (富士康科技集團) works — known arsenic “iPhone City.” That means the travel of goods and radical into and retired of Apple Inc’s main accumulation basal remains curtailed, perchance deepening a deed to iPhone shipments implicit the US holidays.

The city’s ongoing restrictions person already prompted Apple to pass it would vessel less premium devices than anticipated.

It is unclear if oregon erstwhile those restrictions volition lift. For now, the mill is to proceed to run nether a alleged closed loop, oregon self-contained bubble, to support accumulation going, said a spokesperson for Foxconn, known arsenic Hon Hai Precision Industry Co (鴻海精密) successful Taiwan.

While Zhengzhou’s authorities aims to “better equilibrium microorganism prevention and economical development,” the connection said, infections proceed to emergence successful the city, making the easing of curbs a risky exercise.

Zhengzhou reported 1,043 COVID-19 cases for Tuesday, up from 733 a time earlier.

The Zhengzhou facilities are liable for much than 85 percent of accumulation capableness for the iPhone 14 Pro and Pro Max devices, probe radical Counterpoint said.

Those person been Apple’s astir in-demand handsets of this year’s generation, though the Cupertino, California-based institution said connected Sunday that it expects little shipments and transportation delays for those top-tier devices.

Companies successful high-risk areas that marque it to a achromatic database tin run successful a closed-loop system, which Hon Hai has been successful for a while.

However, without question being eased astir the iPhone plant, it is improbable to spot the proviso shortages and logistical disruptions that person been slowing accumulation dissipate.

Morgan Stanley analysts person enactment a worth connected however overmuch gross is astatine hazard for Hon Hai if its Zhengzhou cognition is incapable to vessel immoderate iPhones for the remainder of the twelvemonth arsenic it battles a COVID-19 outbreak.

Although deemed unlikely, the worst-case script for Hon Hai would effect successful a 20 percent shortfall successful expected income this quarter, analysts led by Sharon Shih (施曉娟) wrote successful a probe enactment connected Monday.

That would besides entail a 36 percent driblet successful gross from accumulation of iPhones.

If the institution tin get its accumulation backmost connected way and the COVID-19 concern nether control, income would inactive instrumentality a deed successful the archetypal fractional of this month, but retrieve from past connected and into adjacent month, analysts astatine Citigroup Inc wrote successful a enactment connected Sunday.

Hon Hai connected Monday said it would beryllium lowering its fourth-quarter gross forecast. The institution is owed to study its third-quarter fiscal results today.