Foxconn Offers Improved Outlook for 2022

01 JUNE 2022 - A positive sign from the supply chain. A piece from the Japanese business publication Nikkei has Apple manufacturing partner Foxconn hinting at a better year than previously expected. Speaking with shareholders on Tuesday, Foxconn chairman Young Liu said:

We previously forecast this year we would maintain a similar level from last year, after factoring in inflation, war [in Ukraine] and other uncertainties, but now we think the full year will be better than our estimate…

The chairman was also quoted, saying:

The overall lockdown impact on Foxconn is rather limited. You can tell from our revenues in April, and May's performance is also better than we estimated…

“rather limited” is an interesting term. Nikkei had Foxconn recording revenue in April of US$16.76 billion. That was down just over 4% from March. Not great, until you hear that other iPhone maker Pegatron saw its revenue drop 35%, while MacBook maker Quanta saw revenue drop 40%. That does make Foxconn’s 4% hit seem “rather limited.”

As for how they did it, they did it by employing a closed-loop system that has workers going from work to work-owned dorms to work to work-owned dorms and nowhere else. The piece has Liu indicating that that’s kept Foxconn's “important manufacturing facilities (…) operating at normal levels…” Meanwhile, the piece says “Product development, known as new product introduction in the industry, is proceeding as normal…” According to Nikkei:

Foxconn will continue to closely monitor the COVID situation in China and enhance its closed-loop management to lower risks of any possible supply chain disruptions, [the chairman] said. "We think such COVID controls will continue to happen, and it is our operational focus to make sure the facilities can keep operating.”