iPhone maker Foxconn says production at China’s biggest factory is picking up despite falling revenue

Foxconn, the world’s largest contract electronics maker, said on Thursday that production at its iPhone factory in China was “basically back to normal” and that December revenue, down 12.3% in year-on-year, signaled the start of a recovery.

Production of Apple iPhones was halted ahead of the Christmas and Lunar New Year holidays in January after restrictions to control COVID-19 prompted thousands of workers to leave Foxconn factory lines in the Chinese city of Zhengzhou.

Although down from a year earlier, the company said December revenues were better than expected and a “gradual recovery” at its Zhengzhou plant contributed to “double-digit growth” in sales. revenue from its smart consumer electronics business compared to November. .

A Foxconn source familiar with the matter, who could not be named because she was not authorized to speak to the press, said growth in December over the previous month for its consumer electronics business, including smartphones, showed that the main customer Apple had not cut orders.

A high base from a year earlier, when demand for smartphones picked up after the early impact of the pandemic, also drove the year-over-year decline in revenue, the person added.

Revenue for 2022 rose 10.47% from a year earlier to a record high, driven by growth in core product lines from smartphones to servers, the company said.

In the fourth quarter, the Zhengzhou plant grappled with strict COVID-19 restrictions being eased, which fueled worker dissatisfaction with conditions at the plant. He was also affected by workers’ unrest over wages.

Foxconn offered bonuses to attract new workers and convince others to stay.

A company source told Reuters last month that it was aiming for the plant to resume full production around the end of December or early January.

Analysts say Foxconn assembles around 70% of iPhones and the Zhengzhou factory produces the majority of its high-end models, including the iPhone 14 Pro.

The company said in Thursday’s statement that it expects first-quarter revenue “to be roughly in line with market consensus,” without giving further details.

Analysts expect first-quarter revenue to rise 5.6% year-on-year, according to Refinitiv.

Shares of Foxconn closed down 0.1%, below the broader market which ended up 0.72%.

© Thomson Reuters 2023

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