Foxconn’s revenue rose by a mere 4% last quarter, showing how the fear of an economic recession is curbing demand for iPhones and other consumer electronics. The world’s biggest producer of Apple gadgets reported a total of $48 billion for the typically slower March quarter. That’s a substantial decrease from the three months prior, when a COVID outbreak caused riots in its primary facility, located in Zhengzhou, China, and disrupted iPhone production for several weeks. The plant, which is often referred to as “iPhone City” due to its being the largest global manufacturer of the famous device, only returned to normal operations in January.
Investors are uncertain how the appeal of iPhones and other mobile devices will fare in 2021. Foxconn also mentioned that it anticipates a dip in business in the second quarter compared to the same period the year before and the previous quarter. Xiaomi’s smartphone shipments declined 26% in the fourth quarter after shoppers worldwide held back on buying electronics due to an inflation spike.
Manufacturers like Foxconn, who also put together iPads and other products for major global brands, are re-evaluating the electronics supply chain focused in China. The Taiwanese organization is investing about $700 million in a new factory in India to boost output there, as more manufacturers migrate away from China to avoid the consequences of increasing US-China tensions.
Terry Gou, the billionaire founder of Foxconn, declared he will seek the presidential nomination for Taiwan’s main opposition party, the Kuomintang (KMT), for a second time. In 2019, Mr. Gou resigned from Foxconn and ran in the presidential election, but he withdrew after failing to receive the KMT nomination, which normally favors close ties with China.
At a hotel near Taiwan’s primary international airport at Taoyuan after returning from a week-long visit to the US, Mr. Gou told reporters that the only way to prevent a war with China is to reduce Sino-US stress and get rid of Taiwan’s current ruling Democratic Progressive Party (DPP). ‘Peace is not taken for granted, and people need to make the correct choice,’ he added.
The KMT is in the middle of choosing its candidate for the 2024 presidential election, with Hou Yu-ih, mayor of New Taipei City, viewed as the front-runner. At the same time, animosity between Taipei and Beijing is rising, since China is carrying out regular military drills near the island to demonstrate its sovereignty.
The KMT denies they are pro-Beijing, although they do support keeping up good relations with China. The DPP defends Taiwan’s distinctiveness from China, but the government has repeatedly proposed talks with China, which have been rejected.
