HTC denies poor sales are shuttering factories

HTC has come out to deny that a sales slump is causing them to consider scaling back production with speculation that work has been halted at one of its four main plants.

Reuters reported early in the day that a reporter had visited an HTC plant at the company’s old headquarters in Taoyuan near Taipei and was met with shuttered loading docks and a sign on the locked lobby door that stated: "Lobby is temporarily closed for use. Thank you for your cooperation."

When confronted with this the firm’s CMO Ben Ho stated that “like any manufacturer, we do volume planning to optimise our lines, our manufacturing and production facilities,” which indicated some downsizing could take place. This was, however, quashed by the same company later in the day.

"HTC is not shutting down nor does it have plans to sell any of its factory assets. 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 stated.

Two of the sources that spoke to Reuters added that HTC had combined two of its production lines in Tuoyuan into one operation and that this would reduce capacity by one million phones per month.

One of the other options being banded about, and confirmed by Ho, is to split the design and manufacturing parts of the company in half with this rumour helping HTC’s stock price to rise. The plan would be to outsource manufacturing to firms such as Hon Hai Precision Industry and simply design the devices in house to cut down on costs.

HTC has suffered more than most in recent months and moved to warn investors that it would suffer heavy losses in Q3 2013 with revenue forecasts being cut from NT$75 billion [£1.6 billion] to a number between NT$50 billion and NT$60 billion [£1.1 billion to £1.3 billion].