Reuters reported that Foxconn - Apple's iPhone assembly company, has issued a meticulous and cautious development plan for the current quarter after announcing that the revenue did not meet expectations.
The reason for this situation is that the demand for smartphones has certainly decreased after the COVID-19 pandemic.
Foxconn has repeatedly reiterated complaints and warnings from other Asian technology companies about the decline in sales of smartphones, TVs and devices due to rising inflation. This not only raises concerns about a recession in the economy but also reduces consumer spending.
On August 10, the company stressed that rising inflation will only have a limited impact on mid-range to high-end smartphone demand between now and the end of the year.
However, Foxconn forecasts unchanged revenue growth in its consumer electronics business segment, including smartphones, in the quarter ended in September.
This signals that demand for some devices is slowing after a "significant increase" in the second quarter, when the phone and electronic devices business segment accounted for half of total revenue.
Foxconn's president Liu Young-way said: "In general, we need to make a little more cautious plans in the third quarter. However, compared to the same period last year, this equipment segment of the company is still showing clear signs of growth".
He added: "We will closely monitor developments in geopolitics, inflation and pandemics."
Like other global manufacturers, Foxconn has faced a serious chip shortage that has affected production due to congestion caused by the prolonged pandemic.
However, both Foxconn's net profit and revenue in the second quarter recently increased by 12%, Mr. Liu also said that these figures show the ability to recover in the context of a supply chain problem.
"We and our customers are both large global technology companies with relatively strong supply chain management capabilities. This advantage allows us to minimize the impact of any raw material shortages," Liu shared.
The company also said it expects revenue for network and cloud products to increase sharply in the third quarter, and once again affirmed that overall revenue this year will grow, instead of the previous goal of keeping the same number.
With a vision into the future, Foxconn has been trying to diversify to fields including electric vehicles and semiconductors.
