Foxconn Expects Stronger Sales In Spite Of Economic Gloom

Foxconn factory Shenzhen China 2005 - by Steve Jurvetson from Wikimedia

iPhone manufacturer Foxconn revises full-year expectations upward amidst strong consumer and data centre demand, bucking turbulent conditions

Foxconn on Monday raised its full-year estimated business outlook due to strong sales of smartphones and servers, in spite of fears that the war in Ukraine and rising inflation will drag down spending.

The guidance from the Taiwan-based contract electonics giant comes as analysts see Samsung’s profits rising for the April to June quarter on strong demand from US data centre firms such as Google, Microsoft and Meta Platforms.

Samsung rival Micron on Friday surprised investors by revising its outlook for the current quarter sharply downward, citing a “rapidly changing and uncertain environment” that was taking a toll on consumer spending.

Consumer demand

But Foxconn said late on Monday that June sales jumped 31 percent year-on-year to a record high for the month amidst rising sales of consumer electronics.

The firm said its supply chain management had mitigated the severe chip shortages experienced by all electronics makers.

Smartphones make up most of Foxconn’s revenues, including from iPhone maker Apple.

Foxconn said it could also see “significant growth” for the third quarter and that the outlook had improved for full-year 2022, compared to earlier expectations of no growth.

Double-digit growth

It didn’t provide details about the full-year expectations.

But it said it has seen double-digit year-on-year growth in sales of server and telecommunications products so far this year.

It has kept its workers in a closed-loop system that it said had limited the effects of ongoing lockdowns in China.

Market analysts Daiwa Capital Markets in Taipei said in a report that demand for servers from US-based cloud service providers was helping to fuel double-digit annual growth for the sector, adding that Foxconn’s operating profit is expected to grow 12 to 19 percent this year.

iPhone drive

Foxconn has begun its annual recruitment drive ahead of mass production of this year’s iPhone models, offering bonuses to new assembly-line staff who stay at its factory in Zhengzhou, China, for more than four months, the South China Morning Post reported over the weekend.