Foxconn: Challenge, opportunity & ‘exceptional’ Q1
Foxconn, expects “exceptionally strong” Q1 22, but predicts challenges and big opportunities to come
Nikkei reports Apple’s biggest manufacturing partner, Foxconn, expects an “exceptionally strong” Q1 22, predicts challenges in the rest of the year, but also anticipates opportunities “not seen for decades” as new tech sectors emerge.
Foxconn: Challenge, opportunity & ‘exceptional’ Q1
Foxconn chairman Young Liu offered up his predictions during a speech presented at the company’s year-end special event, January 23. Company founder, Terry Gou, also spoke, echoing Liu’s prediction of challenge and opportunity.
Liu said first quarter performance would likely “outperform” typical years.
Liu revealed revenue up 11% at around $214 billion for net profit of around $3.4 billion in January-September. That’s up 70% year-on-year
Indeed, demand is so strong that many Foxconn workers are getting just two days off for the traditionally long Chinese New Year holiday. “This is a very prosperous situation that we have not seen before,” he said.
iPhone calls in overtime
We know Apple has created a sales smash with its latest iPhone. Recent reports show the device has become the biggest selling smartphone in China with other analysis claiming Apple grabbed 22% of global smartphone sales in the last quarter of 2021.
“Our performance in the first quarter may surpass how we did in the past few years, and likely, some staff at key sites will only get two days off during the lunar new year holidays,” Liu also said.
Companies including Apple and Foxconn are struggling to manage the impact of CoVID-19 and component shortages.
This is leading to build up of inventory, and continues to generate hard to anticipate challenges across supply chains.
Apple meanwhile is expected to introduce the new iPhone SE 3 with 5G and a brand new iPad Air at its next event in March/April, which inevitably requires manufacturers to get started on production to meet anticipated demand.
Mac sales are also looking stronger than ever. Mac sales grew twice as fast as PCs in Q4, reports claim.
Getting people to work overtime seems to be the immediate result.
Challenge and turmoil
Looking ahead, Liu warned of challenges (Gou warned of “turmoil”), but also seemed optimistic at major emerging opportunities in electric vehicles and AR/VR.
Foxconn is investing in electric vehicle processor tech and software, in manufacturing, such as at Lordstown in the US, and introduced its own prototype EVs last October. It also invests in eScooters.
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