Apple partner Foxconn says it will tweak production to avoid holiday disruptions: report
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Foxconn, also known as Hon Hai Precision (OTCPK:HNHPF), said on Thursday that it would tweak production levels to prevent COVID-19 lockdowns at its Zhengzhou, China plant from negatively impacting holiday orders, but that it still expected smartphone revenue to decline this period.
On a company earnings call, Foxconn Chairman Liu Young-way described Christmas and the Chinese Lunar New Year holidays as "very important," according to Reuters, adding that production would be worked out in time so as not to impact these events.
"We will definitely work all out to adjust our production capacity and output, so there is no impact on demand for these two holidays," Liu added.
On Wednesday, it was reported that Foxconn's factory in Zhengzhou, China, which produces a significant portion of Apple's (NASDAQ:AAPL) iPhones is still subject to COVID-19 restrictions even as China lifted the lockdown in the city.
Foxconn's Zhengzhou factory will operate under a closed loop, where workers live and work in a bubble and are isolated from the rest of the world. Many staff members have fled the area, but Foxconn has tried to circumvent that, offering bonuses to workers, while also working with the Chinese government to get to normal production levels, Liu explained.
Earlier this week, Morgan Stanley and UBS tweaked estimates related to the impact from China's COVID-19 lockdown in Zhengzhou, with Morgan Stanley saying an opportunity to "buy the dip" in Apple (AAPL) has emerged.