Foxconn Warns of Slowing Demand for Smartphones


2317 0.92%

Technology Group, the world’s biggest iPhone assembler, said demand for smartphones and other consumer electronics is slowing, prompting it to be cautious about the current quarter.

Foxconn Chairman

Young Liu

said the smartphone market could stay flat for the rest of the year compared with a year earlier. He listed possible risks including the evolving geopolitical situation, inflation and the pandemic.

Foxconn’s warning comes as inflation and economic uncertainty cause consumers to curtail discretionary spending, denting demand for electronics including smartphones.

Last month, smartphone chip maker

Qualcomm Inc.

cut its smartphone shipment forecast for this year and issued a muted sales outlook. Memory chip makers

SK Hynix Inc.

and Micron Technology Inc. have said that their customers—which includes PC and smartphone manufacturers—are starting to tighten costs and adjust inventories.

For the quarter ended in June, Foxconn posted a 12% rise in net profit from a year earlier, driven by solid demand for smartphones and cloud devices. That beat the 1.9% rise expected by analysts, according to S&P Global Market Intelligence.

Revenue rose 12% to the equivalent of $50.3 billion. Foxconn, formally known as Hon Hai Precision Industry Co., said consumer electronics including smartphones, laptops and smart wearable devices accounted for half of its revenue in the last quarter.

For the April-June quarter, Foxconn’s biggest customer

Apple Inc.

reported an almost 11% decline in profit after weathering supply constraints and shutdowns in China, although iPhone sales continued to grow, rising 2.8%.

Foxconn slightly raised its full-year revenue forecast after a solid second quarter, saying it expected growth this year instead of roughly flat performance, without giving specific numbers.

The electronics industry has suffered from a chip shortage in recent quarters. Mr. Liu said that while overall conditions are improving, makers of servers and telecommunications products still face a shortage of semiconductors.

In July, Foxconn said it invested around $800 million into Tsinghua Unigroup, the heavily indebted Chinese chip conglomerate that is undergoing a restructuring. The deal has come under scrutiny in Taiwan, the world’s biggest chip production hub that is wary of neighboring China’s technological advancement in the sector.

Foxconn’s investment won’t go to memory chip maker Yangtze Memory Technologies Co. and contract chip maker Wuhan Xinxin Semiconductor Manufacturing Co., both units of Unigroup, Mr. Liu said.

YMTC is China’s leading memory-chip maker, helping boost the country’s competitiveness in the sector.

Taiwan’s Ministry of Economic Affairs said Wednesday that it is still in the process of reviewing Foxconn’s investment into Unigroup. Mr. Liu said Foxconn has plans in case Taiwanese regulators order Foxconn to spike the deal.

Write to Yang Jie at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Technology News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.