Taiwan's Foxconn raises full-year outlook on strong tech demand

Taiwan's Foxconn, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong tech sales from smartphones to servers despite concerns of slowing demand due to rising inflation.

Taiwan's Foxconn, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong tech sales from smartphones to servers despite concerns of slowing demand due to rising inflation. The Taiwanese firm has grappled with a severe shortage of chips like other global manufacturers, which has hurt smartphone production including for its major client Apple, partly due to COVID-19 lockdowns in China.

But the company's June sales jumped 31% from a year earlier to a record high for the month, thanks to appropriate supply chain management and rising sales of consumer electronics, including smartphones, which make up the bulk of its revenue. Foxconn's better-than-expected June sales come at a time when investors have raised concerns about slowing tech demand during a downturn in major markets due to high inflation and the war in Ukraine.

Chip stocks across the world tumbled on Friday after memory chip maker Micron Technology Inc forecast on Thursday significantly worse-than-expected revenue for the current quarter and said the market had "weakened considerably in a very short period of time." Foxconn said in a statement it was optimistic about its business in the third quarter, saying it could see "significant growth" compared with a year earlier.

For 2022, Foxconn said the outlook has improved and it exceed its expectations for no growth, without providing details. The company, named Hon Hai Precision Industry Co Ltd in full, said it has seen so far this year double-digit yearly growth in sales from servers and telecommunications products.

The company has said that COVID-19 controls in China only had a limited impact on its production as it kept workers on-site in a "closed loop" system. The company's shares ended down 1% on Monday, largely in line with the broader market. They have dropped 3.9% so far this year, giving the firm a market value of $49.3 billion.

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