As a shortage of chips squeezes smartphone production and demand cools after a surge during the pandemic, Apple supplier Foxconn forecasted a 3% drop in revenue for the year, potentially its first annual sales decline in six years.
Separately, the Taiwanese firm, which had halted production in China earlier this week to comply with government restrictions, said it had resumed some production and operations at its Shenzhen campus after meeting government requirements for employees to live and work in a bubble.
On a post-earnings call on Wednesday, Chairman Liu Young-way stated that the company will only have more clarity on supply chain uncertainty in the second half of the year, but that he was “cautiously optimistic” about the company’s 2022 sales estimate.
Liu earlier predicted that the chip scarcity will last until the second part of 2022.
Foxconn, formerly known as Hon Hai Precision Industry Co Ltd, projected sales for the first quarter and the year would be between a 3% decline and a 3% increase. Revenue is likely to climb 1.2 percent this year, according to analysts.
Smartphone revenue is expected to remain flat in 2022, according to the business.
Foxconn has stated aspirations to become a key player in the global electric vehicle (EV) sector in recent months. It stated on Wednesday that it doesn’t foresee significant revenue from electric vehicles until 2023.
