September 18, 2014

HTC reportedly scales production and now looking to outsource

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After having recently posting its first quarterly loss, HTC is in the unenviable position of having to cut spending. With that comes shutting down at least one of their handset manufacturing lines and looking to outsource production. That is, at least, what Reuters and the Wall Street Journal are reporting today. As for HTC, well, they sing a different tune.

Two of the four sources… said HTC had combined production from two lines at Taoyuan into one, which would reduce its potential capacity by about 1 million phones per month, out of a total capacity of around 2.5 million at the site and around 4.5 million including operations elsewhere.

According to HTC, there is no plan to shut down or sell factory assets. They do, however, expect to optimize their lines as well as the manufacturing and production facilities.

“HTC has a very strong balance sheet and will provide the latest financials in our upcoming earnings call to investors and the broader community. Like any manufacturer, we do volume planning to optimize our lines, our manufacturing and production facilities. 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.” – statements from HTC

It should come as no surprise that HTC would want to evaluate and refine their strategies. The current trajectory obviously has not worked well so changing things up has to be a priority.

Reuters | WSJ

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