Mobile Phones Guide
Reuters: HTC Reduces Production Capacity, Looks for Outsourcing Opportunity
HTC seems to bump into more problems this year despite launching a series of premium smartphones that garnered rave reviews worldwide.
According to Reuters, an HTC factory in Taoyuan, Taiwan is temporarily closed as loading docks are shuttered. Two of its four sources claimed that HTC had merged two productions at Taoyuan into one. This means that its potential production capacity is reduced by about a million phones per month.
In addition, majority of the assembly lines in HTC's Shanghai factory were out of production, with only a small number of devices being produced for sale in China. HTC reportedly considered selling these production lines to generate cash.HTC responded to the report by Reuters and denied that it was closing any production and declined to comment on whether it is outsourcing production.
Reuters - "HTC in not shutting down nor has plans to sell any of its factory assets," the company said in an emailed response to queries from Reuters. "HTC has a very strong balance sheet and will provide the latest financials in our upcoming earnings call to investors and the broader community."
HTC's chief marketing officer Ben Ho also stepped in to comment on the issue.
Reuters - "Whether we are operating those facilities depends on market demand and our own expectations. When you have less demand you work with less facilities to optimize your costs. When you have demand, or bigger growth, you definitely have to activate all these facilities."
HTC reported its first quarterly loss earlier this month and cash flow from its operations plunged to a negative $707.27 million as of end June. Its cash position also dropped to T$48.1 billion from T$55.5 billion a year earlier.