HANA in China Backs to Operate with the Concern of Supply Chain Due to the Outbreak

HANA Microelectronics Public Company Limited (HANA) has released the update on the situation related to HANA’s subsidiary in China in relation to the Coronavirus outbreak.

In accordance with the most recent Chinese government requirements, as of 7 February 2020, Hana Microelectronics (Jiaxing) Co., Ltd. which is a subsidiary of HANA informed that any employee returning to the company on 10 February 2020 from a province other than Jiaxing has to be placed under quarantine for 14 days. As a result, HANA estimates that during the following two weeks after resumption on 10 February 2020, the factory can only operate at a capacity of not more than 30% and assuming those employees are cleared to work the output will increase over the following weeks.

Over the first two days since the company has re-opened the number of factory workers who have returned (from external provinces) is less than 10% of the original number who left at the start of the Chinese New Year. Whilst HANA expects this to increase over time, it is not known ultimately how many of those employees will return due to the concerns over travelling on public transport but it is estimated it will be significantly less than the original number.

From this latest update, whilst the factory has resumed on 10 February 2020, it will be running at a much reduced level and at this time it is estimated it will take at least another 4 -5 weeks until the output can be at a normalized level.

HANA understands these latest government directives will be imposed across all Chinese factories and as such there is a concern as to the impact on the supply chain for parts being supplied from any China located suppliers to Hana Jiaxing, Hana’s Thai factories both in Ayutthaya and Lamphun, Hana Cambodia & Hana Technologies Ohio, USA.

The potential impact to the supply chain whilst currently being assessed is still unquantified at this stage and HANA will make further announcements when it has more clarity on the situation. This will depend on a number of factors, not least of which will be the rate of the spread of the corona virus and any respective government directives as a result.