HTC tight cash flow due to sharp drop in product sales

According to a source, the company has shut down at least one of its four main production lines, with 20% of its closed production lines, as HTC has tightened cash flow due to a sharp drop in product sales, Reuters reported. The company also agreed to adopt a similar model with Apple, charge product design, the production and assembly of products outsourced.

A Reuters correspondent in Taiwan found that HTC's factory working in Taoyuan, Taiwan, was closed and a "moratorium, thank you for cooperation" sign was hanging on the door.

HTC's flagship HTC One failed this year to help it out of trouble, and it suffered from external supply of parts and internal unrest. HTC reported its first quarterly loss this month and the company's operating cash flow fell to a negative 707.27 million dollars as of June.

HTC has combined two production lines in the Taoyuan plant into one, with a 1 million reduction in cell phone capacity each month, sources said. The total capacity of the Taoyuan plant is about 2.5 million, combined with the capacity of other local factories, the company can produce 4.5 million units per month.

The source also said that most of HTC's assembly lines in Shanghai (2 million per month) had been discontinued and only a small number of handsets were being produced in the mainland. HTC is considering the sale of abandoned production lines in the mainland and Taiwan to ease the cash-flow crunch in the company.