HTC has reduced its manufacturing capacity by a fifth following disappointing sales of its smartphones, according to one recent report.
As reported by Reuters, the Taiwanese smartphone manufacturer has halted one of its four main production lines, which is said to represent around 20 percent of its overall manufacturing capacity.
The report places the blame on a “sales slump” that has put pressure on the company’s cash flow. It also claims that HTC, which recently released the HTC One Max, will now outsource some of its smartphone production.
One Reuters reporter visited an HTC factory in Taoyuan, Taiwan, and found it to be completely shuttered. When asked about the closure, HTC’s chief marketing office Ben Ho explained that “When you have less demand you work with less facilities to optimise your costs.”
However, HTC has since denied that it has closed any of its facilities. Speaking to The Verge, the company said that “HTC is not shutting down nor does it have plans to sell any of its factory assets.”
The company also claims to have “a very strong balance sheet,” and will reveal as much at its next earnings call scheduled for November 5.
Essentially, it seems that HTC has scaled back its operations to fit with the current lower demand for its handsets, but has not permanently closed any of its manufacturing facilities.
With rumours of a major collaborative effort between HTC and Amazon on a bold new smartphone concept, the manufacturer may be ramping back up to full capacity some time over the coming months.
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