Taiwan’s Foxconn raises full-year guidance on strong technology demand

Taiwan’s Foxconn, the world’s largest maker of custom electronics, on Monday raised its full-year business outlook on strong sales of technology from smartphones to servers despite fears of slowing demand due to rising inflation. The Taiwanese company, like other global manufacturers, has been grappling with a severe chip shortage impacting smartphone production, including for its main customer Apple, in part due to the COVID-19 lockdown in China.

But the company’s June sales rose 31 percent year-on-year to a record high for the month, thanks to solid supply chain management and rising sales of consumer electronics, including smartphones, which made up the majority of sales.

Foxconn’s better-than-expected sales in June came as investors raised concerns about slowing demand for the technology amid a slump in key markets due to high inflation and the war in Ukraine.

Chip stocks worldwide fell on Friday after memory chip maker Micron Technology Inc on Thursday forecast current-quarter earnings to be significantly worse than forecast and said the market had “weakened significantly in a very short period of time.” Foxconn said in a statement it was optimistic about its business in the third quarter and said it could see “significant growth” year over year.

For 2022, Foxconn said the outlook had improved, beating expectations of no growth, without providing details. The company, whose full name is Hon Hai Precision Industry, said it had seen double-digit annual sales growth for its servers and telecommunications products so far this year.

The company said the containment of COVID-19 in China had a limited impact on its production as it kept workers on site in a “closed loop” system. The company’s shares ended Monday down 1 percent, broadly in line with the broader market. They are down 3.9% so far this year, giving the company a market value of $49.3 billion.