HTC halts production line amid cashflow crisis

Android smartphone giant HTC has halted one of its four production lines amid a cashflow crisis.

Reuters reports the company’s factory in Taoyuan has its loading docks shuttered and its front door locked, with a sign reading: “Lobby is temporarily closed for use. Thank you for your cooperation.”

The closed production line accounts for around one-fifth of the company’s total capacity, accounting for a million devices per month out of its total production capacity of 4.5 million devices per month.

For its part, HTC denies it has plans to permanently shut down the factory or outsource production.

“Like any manufacturer, we do volume planning to optimise our lines, our manufacturing and production facilities,” HTC chief marketing officer Ben Ho says.

“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 optimise your costs. When you have demand, or bigger growth, you definitely have to activate all these facilities.”

Earlier this month, the company it had slid into the red during the third quarter, posting a quarterly operating loss of $US120 million.

The latest news comes at a difficult time for the company, with senior executives at the gadget giant arrested last month and detained by the Taipei District Court, accused of embezzlement and attempting to steal trade secrets from the company.

The company also recently suffered a major flop in the marketplace earlier this year with the failure in the US of the HTC First, a device also known as the “Facebook Phone”.

The device, which used the Facebook Home launcher as an interface over Google Android, was discontinued after shipping just 15,000 units.