NEW TAIPEI CITY, Taiwan -- Key iPhone assembler Foxconn on Tuesday raised its outlook for the current quarter and the full year, citing improving supply chain stability in China.
Young Liu, chairman of the world's largest contract electronics manufacturer, delivered the upbeat news to shareholders at the company's headquarters in New Taipei City.
"The overall lockdown impact on Foxconn is rather limited. You can tell from our revenues in April, and May's performance is also better than we estimated," Liu said, referring to strict COVID containment measures imposed in and around Shanghai.
"We previously forecast this year we would maintain a similar level from last year, after factoring in inflation, war [in Ukraine] and other uncertainties, but now we think the full year will be better than our estimate," he added.
Foxconn recorded 486.46 billion New Taiwan dollars ($16.76 billion) in revenue in April, down 4.1% from the previous month. For comparison, fellow iPhone assembler Pegatron and MacBook maker Quanta Computer saw their revenues plunge 35% and 40%, respectively, on the month due to the Shanghai lockdowns. Foxconn is scheduled to disclose its May revenue in early June.
Foxconn serves a wide range of clients, including Apple, Google, Facebook, HP and Dell. It has more than 30 manufacturing complexes in China, making the country its most important manufacturing base.
Liu said Foxconn's important manufacturing facilities have been operating at normal levels under closed-loop management measures, which restrict movements in and out of factories and company dormitories. Product development, known as new product introduction in the industry, is proceeding as normal, he said.
Foxconn will continue to closely monitor the COVID situation in China and enhance its closed-loop management to lower risks of any possible supply chain disruptions, he said. "We think such COVID controls will continue to happen, and it is our operational focus to make sure the facilities can keep operating."
China's official manufacturing purchasing managers' index, a key measure of factory activity, ticked up slightly in April, though it still remains just below the 50-point line separating contraction from expansion.
Meanwhile, Foxconn intends to further strengthen its semiconductor capabilities, as chips will play a crucial role in the booming electric vehicle era, Liu said. The company's Hon Hai Research Institute will also allocate resources to research and develop of low-earth-orbit (LEO) satellite technologies, he added.
"We will design, research and develop LEO connectivity, and build on-the-ground receivers for connected cars as part of our automobile strategy," Liu said.
The chairman said Foxconn plans to mass produce silicon-carbide chips for onboard charging and charging poles next year, and start making microcontroller chips and Lidar sensor chips to detect range and distance in 2024.
"Our goal is to provide customers a wide portfolio of all small integrated circuit chips used in EVs in 2025 so clients won't face chip shortages when choosing our solutions," Liu said.
The auto industry was one of the hardest hit by the global chip shortage that emerged in late 2020 amid the turmoil of the pandemic.
Foxconn has announced plans to build chip plants in India and Malaysia with local partners this year. It also bought a chip plant from Taiwanese memory chip maker Macronix International last summer and is the biggest shareholder of Sharp, a Japanese tech conglomerate with chip facilities.