Foxconn, one of the world’s largest electronics manufacturers and the maker of Apple’s iPhones, expects sales to be lower this year than last year. The Taiwanese company, formally Hon Hai Precision Industry, previously counted on the same amount as last year.
Foxconn’s cut in sales expectations underlines the challenging market conditions for electronics worldwide. High inflation and the uncertain economic outlook have made consumers and businesses much more cautious about increasing spending on electronic devices. For example, Apple, Foxconn’s largest customer, saw its turnover drop for the third quarter in a row last quarter. That is the most extended period of declining sales for the American tech group since 2016.
The Chinese market, the world’s largest market for smartphones, computers and tablets, in particular, is struggling with disappointing sales due to the deteriorating economic conditions in the country. High unemployment among young Chinese people and a crisis in the real estate market are causing reluctance among consumers there.
Foxconn nevertheless booked more net profit in the second quarter than experts had expected. Earlier this month, the company announced that turnover fell by 14 percent last quarter. That was the first decline in sales since the last quarter of 2021. The first half of the year is traditionally a lesser period for Taiwanese electronics manufacturers. That’s because customers like Apple typically release most new products in the second half of the year.
Due to trade tensions between the United States and China and between China and Taiwan, Foxconn is moving some of its production from China to India. For example, the company invests billions in new factories in that country. Apple also urges its suppliers to be less dependent on production in China. Foxconn has a vast iPhone assembly complex in the Chinese city of Zhengzhou. That complex is known as iPhone City because it is the world’s largest production site for the Apple smartphone.