As consumer electronics demand weakened, Apple Inc. supplier Foxconn (2317. TW) announced intentions to increase investment outside of China and entice automakers to its contract manufacturing business on Wednesday.
Foxconn, which assembles 70% of iPhones, has been diversifying manufacturing away from China after COVID-19 restrictions shut down its biggest iPhone facility last year. The corporation also wants to avoid being hurt by Beijing-Washington trade tensions.
Foxconn Chairman Liu Young-way remarked on an earnings call that customer demand determines how to utilize production capacity in ICT.
“In response to consumer and supply chain alterations,” expansion was needed in the U.S., Vietnam, India, Mexico, and China.
“Going forward the share of abroad area will continue to expand,” Liu said of the company’s 70% income from Chinese items.
The world’s largest contract electronics maker expects first-quarter and full-year sales to be flat due to strong computer, cloud, networking, and component goods growth. Consumer electronics demand was sluggish.
Foxconn’s consumer electronics revenue exceeds 50%.
Liu noted that due to last year’s high base, inflation, and the deteriorating global economy, smart consumer gadgets might decrease marginally.
Foxconn made news in November when COVID-19 restrictions forced hundreds of workers to leave its enormous Zhengzhou facility, delaying output before Christmas and the Lunar New Year.
Foxconn, which hopes to emulate its iPhone success with electric vehicles, said it was approached and approached by numerous automakers.
Liu said Foxconn would grow its EV business in North America and work more closely with established and start-up carmakers.
Foxconn, formerly Hon Hai Precision Industries Co Ltd, has bought the old General Motors Co (GM.N) facility in Lordstown, Ohio, and appointed former Nissan (7201.T) CEO Jun Seki to manage its EV business growth.
Liu expects EV component revenue to jump to between T$50 billion and T$100 billion this year from T$20 billion last year. He claimed Foxconn would make EV battery packs in Ohio and ESS battery cells and packs in Wisconsin.
Mexican EV component manufacture has also increased.
The corporation reported a 10% drop in net profit to T$40 billion ($1.3 billion) for the October-December quarter, matching analyst expectations.
The firm said that Zhengzhou, which makes most of Apple (AAPL.Opremium )’s models, including the iPhone 14 Pro, has resumed production.
Apple predicted that revenue would decline for a second quarter last month, but iPhone sales would likely rise when Chinese production resumed after COVID-19 shutdowns.
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