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Foxconn’s Dec Sales Fell By 12% As An Apple Supplier

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Do you know Foxconn’s Dec Sales Fell By 12% As An Apple Supplier? The largest manufacturer of contract electronics in the world, Foxconn of Taiwan, declared on Thursday that production at its iPhone plant in China had “essentially returned to normal” and that a recovery had begun despite December sales falling 12.3% year over year.

After thousands of employees were forced to leave Foxconn’s production lines in China’s Zhengzhou city due to COVID-19 control measures, production of Apple iPhones was halted before Christmas and the Lunar New Year holidays in January.

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Although it was less than the previous year, the company reported that revenue for December was better than it had anticipated and that “double-digit rise” in revenue for its smart consumer electronics sector compared to November was due in part to a “gradual recovery” at its Zhengzhou plant.

Foxconn’s Dec Sales Fell By 12% As An Apple Supplier

Foxconn's Dec Sales Fell By 12% As An Apple Supplier
Foxconn’s Dec Sales Fell By 12% As An Apple Supplier

The growth in December compared to the month before for its consumer electronics business, which includes smartphones, according to a Foxconn source familiar with the situation, who could not be identified because they were not authorised to speak to the press, showed that major client Apple did not cut orders.

The annual fall in income was partly caused by a high base from a year earlier, when demand for cellphones rebounded following the pandemic’s initial effects. Revenue for 2022 increased by 10.47% over the prior year to a new high, the business reported. Growth was driven by major product lines, including servers and smartphones.

The Zhengzhou plant struggled with severe COVID-19 regulations in the fourth quarter, which are now being relaxed, which fueled worker unhappiness with the working environment at the factory. Worker dissatisfaction over salary also had a negative impact. The Zhengzhou facility struggled with stringent COVID-19 regulations in the fourth quarter of 2022, which heightened worker unhappiness with the workplace environment.

Following a COVID-19 outbreak and steps taken to contain the virus, production of the Apple gadget was halted in time for the Christmas and Lunar New Year vacations. This was because thousands of employees were forced to leave. Additionally, a wave of employee unrest over payment problems affected it.

Foxconn has been providing bonuses to entice new hires and persuade current employees to stick around. Last month, a business source told Reuters that the plant’s goal was to restart full production between late December and early January. Shares of Foxconn ended the day down 0.1%, trailing the market as a whole, which gained 0.72%.

According to analysts, Foxconn assembles about 70% of iPhones; the majority of its premium models, like the iPhone 14 Pro, are produced in the Zhengzhou facility. Without going into any detail, the company stated in its statement on Thursday that it anticipates first-quarter revenue “to be substantially in line with market consensus.” Refinitiv estimates that analysts anticipate a 5.6% year-over-year increase in first-quarter sales.

According to a source familiar with the company, Foxconn anticipates the plant to resume full production between late December and early January, according to a story published yesterday by the Chinese news site Ifeng.com. Foxconn declared that “the overall pandemic situation has been brought under control.”

As production entered the off-peak season and certain shipments were hampered by Covid-19, Foxconn’s revenue from smart consumer electronics was cut severely last month. Due to the introduction of new devices and improved component availability, revenue from computer products increased by double digits over the previous year. Revenue from networking and cloud products increased as server demand was high.

Foxconn’s revenue increased 13.6 percent to a new high of about TWD6 trillion during the course of the 11 months that ended on November 30.

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