Taiwanese manufacturing firm Foxconn has long been the major supplier or Apple and several other phone companies. The firm has now disclosed that it expects a drop in revenue of up to 15% from its consumer electronics and enterprise products in the first quarter. The company projects that revenue will rebound in the second quarter as production returns to normal in its China factories.
Foxconn which is also known as Hon Hai Precision Industry Co Ltd has several factories domiciled in China where production has been halted due to the Coronavirus outbreak and an extended Lunar New Year holidays. The Taiwanese company disclosed that it does not expect to see any revenue growth in the first half and a “mild downward revision” from original guidance of “slight growth” for the year due to the coronavirus.
The development was responsible for Apple’s decision to reduce its March quarter sales guidance citing a slower production pace in China amid travel restrictions and an extended Lunar New Year break.
Foxconn isn’t the only company affected as overall manufacturing activity has been almost entirely crippled in China by travel restrictions and quarantine requirements aimed at containing person-to-person transmission of the coronavirus.
The Taiwanese manufacturing giant is, however, upbeat about its business as it expects normal production to resume in China by March ending.
The Coronavirus is a flu-like virus that was first detected in Wuhan from where it has spread to other regions in China. The virus has since spread to over 60 countries with more than 86,000 people infected and over 3,000 people, many of them in China.
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