Foxconn, an Apple supplier, increases its foreign investment as consumer electronics demand declines
Major iPhone vendor Foxconn issued a warning, stating that it anticipated a drop in consumer electronics demand in the upcoming year.
The business provided the forecast as it released mixed financial results, hitting top-line but missing bottom-line targets.
Major Apple supplier Foxconn forecasted a 10% year-over-year reduction in profit for 2022 and a decline in consumer electronics demand for the entire next year in its results report, which was issued on Wednesday.
The disapproving attitude was a reflection of Apple's unimpressive consumer sales projections. According to Apple's chief financial officer, Luca Maestri, the company anticipates double-digit declines in Mac and iPad sales compared to the same March quarter in 2022.
The company asserted that iPhone sales will decline less in the March quarter than in the December quarter.
Foxconn said that as it grew its footprint outside of mainland China, discovering new markets will be a priority objective for the company in 2023. Earlier this year, Foxconn committed to considering expanding its presence in India.
Foxconn's full-year sales came to 511.85 billion Chinese yuan ($74.14 billion), above analysts' top-line estimates, while its net income, at CNY20.07 billion, fell short of forecasts, according to FactSet.
Foxconn, situated in Taiwan, is a prominent manufacturer for businesses in the consumer electronics industry, but it is best known for its collaboration with Apple, which depends on Foxconn to make and assemble many of its products, notably the iPhone.
Foxconn's iPhone manufacturing plant in Zhengzhou came to light in late 2022 after videos of employees fleeing the area under severe Covid lockdowns went viral.
The most stringent Covid regulations imposed by the Chinese government have since been relaxed, but Apple and other major technology firms have emphasised to suppliers the need for global diversification.
The repercussions of a society that is fundamentally post-pandemic are being felt by consumers, which has led to a steep fall in the demand for technology goods.
Also, the volatility of the global financial environment has decreased discretionary income, making it difficult for firms to continue the fast growth that many saw from 2020 to late 2021.
