Foxconn, one of Apple’s main contractors, is bracing for tough times. The Taiwanese giant, which specializes among other things in the assembly of electronic devices, has notably warned that its revenues for the current quarter could be impacted by the combination of several factors. Among them, inflation (which partly results from the war in Ukraine), but also weaker demand in certain sectors. The firm also evokes the global shortage of components which impacts the smartphone market and therefore the production of iPhone. A significant difficulty given Foxconn’s dependence on Apple, its largest customer.
To a lesser extent, Foxconn also talks about the intractable “zero covid” policy put in place by the Chinese authorities and the strict confinement of several large urban centers. If the firm explains that its production sites are little worried by Chinese sanitary measures (Foxconn maintains its employees on site, using a “closed circuit” system to avoid contamination), the demand for certain products assembled in its factories fell, on the huge Chinese market, following these successive periods of confinement.
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Foxconn is eyeing the electric vehicle market…
Faced with this delicate context, Foxconn wishes to reduce its dependence on the smartphone market, notes Reuters. The British press agency reports that the group would have the idea of reorienting itself in part on an increasingly buoyant market: that of the electric vehicle, for which all the lights are green. According to Foxconn, the electric vehicle market could weigh no less than 34 billion dollars by 2025… enough to explain its diversification objectives.
” There are many uncertainties in the market right now [et elles] pose problems for supply and demand,” said Liu Young-way, chairman of the board of directors of Foxconn. That said, for the full year 2022, the subject forecasts flat revenue compared to 2021 and explains that the expected decline in revenue for the current quarter is explained by the comparison with a higher than normal base l ‘last year. The launch of new products later this year (understand the release of the iPhone 14) should nevertheless allow Foxconn to compensate for this inconvenience that we are promised to be temporary.