HTC has halted at least one of its four main manufacturing lines and axed a fifth of its total capacity.
Reuters deep throats claim that the outfit is outsourcing production as a sales slump puts pressure on its cash flow.
An HTC factory has its loading docks shuttered and a sign on a locked lobby door that read: "Lobby is temporarily closed for use.
The company has been hammered by supply chain constraints and reported its first ever quarterly loss this month and its cash flow from operations dropped to a negative $707.27 million as of the end of June.
It is truly annoying for the company whose gizmos usually receive rave reviews. HTC denied it was shutting down any production and declined to comment on whether it was in outsourcing talks, t insisted that it is not shutting down nor has plans to sell any of its factory assets.
When asked about the shuttered factories HTC Chief Marketing Officer Ben Ho just said that it was "optimising its lines, manufacturing and production facilities". This is an interesting use of the word "optimise" but if it takes off, people will be talking about optimising open doors, and optimising their lying mouths.
Reuters sources say that HTC had combined production from two lines at Taoyuan into one, which would reduce its potential capacity by about one 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.
Manufacturing has been halted since at least August on the line, housed in a facility called Building H, while production continued at a nearby plant known as TY5.
HTC's Shanghai factory, which can produce 2 million phones a month, were also out of production.
HTC was considering selling the out-of-use production lines in China and Taiwan, two of the sources said.