Can Foxconn truly meet all manufacturing obligations despite the virus?

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Foxconn Claims Readiness to Meet Manufacturing Obligations Amidst Virus Concerns

Foxconn has stated that it has implemented measures to ensure its continued ability to meet all global manufacturing obligations, despite the ongoing coronavirus outbreak. The company, formally Hon Hai Precision Industry Co Ltd, affirmed that its facilities in China were operating under existing holiday schedules during the extended Lunar New Year period and would continue to do so until normal business operations resumed. This assertion comes as Apple, a significant customer, has acknowledged the uncertainty the disease presents, leading to a wider-than-usual earnings outlook for the March quarter.
Foxconn's Stated Preparedness

Foxconn has publicly communicated that it has measures in place to fulfill its manufacturing commitments. While specific details of these measures were not disclosed, the company's statement indicates a level of preparedness to manage potential disruptions. This assurance is crucial given the company's extensive global manufacturing footprint.
Operational Status During Holiday Period

The company's plants in China were operating according to the extended Lunar New Year holiday schedule. This holiday period, which was extended by the Chinese government to February 2 to help contain the virus's spread, meant that standard business operations had not yet fully resumed. Factories located outside the Wuhan area were scheduled to reopen on February 10.
Apple's Acknowledged Uncertainty and Contingencies

Apple, a key client for Foxconn, has publicly addressed the uncertainty stemming from the virus outbreak. Apple CEO Tim Cook noted that while the company has suppliers in the Wuhan area, it also possesses alternative sourcing options. This acknowledgment of potential disruptions, even with contingency plans, highlights the broader industry challenges. Apple has factored the delayed restart of some operations into its revenue forecasts for the March quarter.

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Can Foxconn truly meet all manufacturing obligations despite the virus?

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