In October and November of last year, one of Foxconn’s largest factories in China, which produced most of the latest generation of older iPhones, was out of action due to the COVID-19 outbreak and its aftermath. Apple’s prime contractor’s quarterly report showed that net income for the October-December period fell 10% to $1.31 billion, barely meeting analysts’ expectations.
How stressed Bloomberg, Foxconn’s quarterly revenue reached $64 billion at the same time, and operating profit fell 16%. The company is actively exploring the possibility of building additional facilities in India as Apple pushes its manufacturing partners to move facilities outside of China. Foxconn Chairman Young Liu’s recent meeting with Indian Prime Minister Narendra Modi should accelerate the localization of electronics manufacturing in the country.
The ill-fated factory in Zhengzhou, China, which was reported to have suffered from sanitary lockdowns and labor unrest in the most recent quarter some sources, in February this year showed no signs of high activity. In the past, up to 500,000 people could work here, but today, according to various estimates, the number of employees does not exceed 100,000 or 200,000 employees. Notably, Foxconn isn’t even hiring new workers for its Zhengzhou plant, which could indicate not only a seasonal lull but also a shift in priorities in the geographic diversification of the business.
For this quarter, Foxconn expects to maintain revenue at current levels and for the full year to maintain revenue at current levels. The Taiwanese giant wants to compensate for the drop in demand for consumer electronics by increasing demand in the server segment, the telecommunications equipment market and even personal computers.