Foxconn sees challenges ahead

1 min read

Another leading electronics company, Apple supplier Foxconn, has warned that current-quarter revenue is likely to slip due to rising inflation, cooling demand and escalating supply chain issues which have been exacerbated by continued lockdowns in China.

Foxconn, the world's largest contract electronics maker, has been struggling with severe ongoing shortages of chips which has, in turn, had a big impact on Apple and smartphone production.

Not only has the company been struggling with falling demand in China, as people have been forced to remain shut in doors, but now high inflation around the world is impacting demand and the war in Ukraine has added yet another problem to an already lengthy list of woes.

Because of falling smartphone sales Foxconn has said that it is urgently looking to reduce its reliance on consumer electronics and is planning to diversify into other sectors, in particular electric vehicles which it says could be worth $34bn to the business by 2025.

Surging levels of inflation are now having an impact on high-end products and not just more basic standard ones.

While the consumer space may be struggling Foxconn appears to remain upbeat about its other businesses such as components, computing products and cloud and networking products.

Once again, the challenges around supply and demand are impacting businesses and forcing them to reassess how and what they do.