NEW TAIPEI, Taiwan -- Key Apple supplier Foxconn on Friday said it expects limited impact from massive flooding in the Chinese city of Zhengzhou, the world's biggest iPhone production base, alleviating concerns over possible effects on assembly of the latest version of the smartphone, which is set to begin in weeks.
"We now don't see much impact from the floods in Zhengzhou," Foxconn Chairman Young Liu told the company's annual shareholders meeting in New Taipei City, near Taipei. The ongoing, unprecedented chip and component shortage plaguing the industry is also unlikely to cause major problems for Foxconn's business, Young said.
"We are optimistic about the outlook for the second half of this year," he added. In the first half, Foxconn has already notched up record revenue of 2.7 trillion New Taiwan dollars ($964 billion), up 31% from the same period in 2020.
Liu also said Foxconn sees an increasing need to build regional manufacturing centers around the world. The company already has a global production footprint, and will keep building complete regional supply chains to keep up with demand.
"It's an era in which all companies need to build regional centers," Liu said, marking a change from the previous concentration of manufacturing in one place, such as China. "Foxconn is building vertical integration supply chains across all regions, like what we built in China in the past," he said.
Record rainfall in central China, which has been described as a once-in-a-century event, has caused severe floods, with the Henan provincial capital of Zhengzhou the worst-hit.
That has sparked concerns about preparations for production of the latest iPhone. On Wednesday, water breached the perimeter of Foxconn's iPhone manufacturing complex in the city, affecting deliveries of components and disrupting the commutes of some employees, the company said. All facilities, production equipment and employees are safe, it added.
Foxconn has set up an emergency response team to monitor the situation in Zhengzhou and help employees who were unable to return to their dormitories outside the complex. Water has started to recede from the edge of the complex, the company told Nikkei Asia.
Foxconn, the world's biggest contract electronics manufacturer, is the largest iPhone assembler and operates manufacturing bases for Apple's iconic handsets in Zhengzhou, Taiyuan, and Shenzhen in mainland China, as well as in India. Foxconn and other iPhone assemblers are scheduled to begin assembling the newest iPhone model in August in China.