Highlight Foxconn
- Approximately 70% of iPhones are assembled by Foxconn, according to analysts
- Most of its alleged iPhone 14 Pro production is done in its Zhengzhou facility.
- Due to COVID-19, Foxconn’s Zhengzhou facility was subject to severe limitations.
The largest manufacturer of contract electronics in the world, Foxconn, declared on Thursday that production at its iPhone plant in China had “essentially returned to normal” and that a recovery had begun despite December revenue falling 12.3 percent 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.
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.
According to a Foxconn source with knowledge of the situation who declined to be identified because they were not authorised to speak to the media, the company’s consumer electronics business, which includes smartphones, grew in December compared to the previous month, indicating that its top customer Apple did not reduce 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 percent over the prior year to a record high, the business reported. Growth was led 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.
Foxconn has provided bonuses to entice new hires and persuade current employees to stick around.
Last month, a business source told Reuters that the plant hoped to restore full production in late December or early January.
According to analysts, Foxconn assembles about 70% of iPhones, and the majority of its premium models, including the iPhone 14 Pro, are made in the Zhengzhou factory.
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 percent yearly increase in first-quarter sales.
Shares of Foxconn ended the day lower by 0.1 percent, underperforming the overall market’s 0.72 percent gain.