Hon Hai Zhengzhou plant reportedly starts night shift production

TAIPEI (CNA) — Taiwan-based manufacturing giant Hon Hai Precision Industry Co., the most important supplier to Apple Inc., has started night shift production to roll out iPhones at its production site in Zhengzhou, Henan Province, China, according to Chinese financial news website Sina.com.

The news outlet said Monday that Hon Hai, also known as Foxconn on the global market, started night shift production Feb. 27 at the Zhengzhou factory after the plant reopened following the Lunar New Year holiday.

The resumption of production at Hon Hai’s Zhengzhou factory has been closely watched by the market since China has introduced lockdown measures in more than 50 cities to contain the spread of the novel coronavirus (COVID-19), which has limited movement and raised concerns over iPhone production due to a lack of labor.

Shares in Apple suppliers such as Hon Hai have faced downward pressure in recent trading sessions as many investors fear the COVID-19 contagion has interrupted the U.S. consumer electronics giant’s supply chain and hampered production.

Since the beginning of February, Hon Hai shares on the Taiwan Stock Exchange have shed 4.81 percent and closed at NT$79.20 Monday, in which time the benchmark weighted index has fallen 2.83 percent.

The report cited sources as saying Hon Hai’s Zhengzhou plant recently launched a recruitment campaign to hire 6,000-7,000 workers to boost its workforce after the reopening.

Asked about the Sina.com report, Hon Hai said it did not respond to reports about its individual production bases but added that the company will follow the law in terms of production resumption in China, which is combating the spread of COVID-19 in a bid to protect its Chinese employees.

Hon Hai said the company has adopted prudent measures in reopening its factories in the country, which could impact its revenue for 2020.

Before the beginning of night shift production at the Zhengzhou factory, Sina.com said. Hon Hai provided bonuses ranging from 5,000-7,500 Chinese yuan (US$718 to US$1,078) to boost recruitment at the Zhengzhou plant after the New Year holiday in a bid to raise production.

Hon Hai’s bonuses are also used as subsidies for its workers in their efforts to combat the spread of the virus, the report said.

Hon Hai is one of the largest Taiwanese investors in China, and currently hires more than 1 million workers there.

According to Sina.com, employees who previously worked at Hon Hai’s factory in Taiyuan, Shanxi Province are being encouraged to return to the plant by providing as much as 6,000 yuan as a bonus.

The Taiyuan plant churns out a wide range of electronic components such as smartphone casings and printed circuit boards.

The report said Hon Hai’s Yantai factory in Shandong Province, which produces TV sets and game consoles, is also providing bonuses to encourage workers to return.

The report said as of Feb. 26, only about 30,000 workers had returned to the Taiyuan base, which previously had a workforce of 70,000, adding that the Yantai factory has hired about 1,000 a day recently.

China accounts for about 75 percent of Hon Hai’s total production.

Hon Hai has scheduled an investor conference on Tuesday to give its assessment of first quarter operations. Analysts said they expect the company to focus on progress made in production resumption in China.