Technology

Apple Supplier Foxconn Forecasts Strong Q1 Results

When Apple Inc. (NASDAQ: AAPL) reported December quarter results, the company posted quarterly revenue of more than $100 billion for the first time ever. More than 60% of that revenue came from the iPhone, and most of those iPhones were assembled by Taiwan-based Hon Hai Precision Industry, better known as Foxconn.

In a statement issued Thursday morning and cited by Reuters, Foxconn said it expects its consumer electronics revenue for the March quarter to increase by more than 15% compared to 2020 revenues. While that sounds like a nice boost, keep in mind that in the first quarter of last year, Foxconn’s total revenue fell by 12% due to the COVID-19 outbreak that hit China in the first two months of the year. Profits fell by 90% in the first quarter of 2020.

A 15% increase in first-quarter revenue suggests a total of around TWD$1.07 trillion (US$38 billion). That would put the company’s revenue only slightly above a total of $37.8 billion in the first quarter of 2019.

Since getting hammered by the pandemic last year, Foxconn has agreed to build an assembly plant for MacBooks and iPads in Vietnam and already operates an iPhone assembly plant in India. Other Apple suppliers, including Wistron, Pegatron and Samsung, also boosted their investments in India, largely due to the stiff tax India imposes on smartphones that are imported.

Analysts have been raising their estimates of the number of iPhones Apple will deliver in the current quarter. On Wednesday, Cowen raised its iPhone delivery estimate by 2 million units to 57 million.

In its Thursday statement, Foxconn said it expected revenue for its cloud products and computing products to increase by about 10% in the first quarter. The company expects total revenue to rise by 10% in 2021.

Late last month, Foxconn announced a deal with electric vehicle maker Fisker to manufacture a jointly developed vehicle sold under the Fisker brand. The manufacturing giant also has struck deals with China-based EV makers Byton and Zhejiang Geely, as well as Stellantis’s Fiat Chrysler division. There was even talk that Foxconn may be in line to build the much-rumored Apple Car.

According to Reuters, Taiwan’s January export orders, a leading indicator of global technology demand, surged 49% from a year earlier to $52.72 billion. The government last month revised its outlook for 2021, predicting the economy will grow at its fastest pace in seven years, with gross domestic product rising by 4.64% on the tech-driven increase in exports.

Taiwan Semiconductor Manufacturing (TSMC), the world’s largest contract chipmaker, posted its best-ever quarterly profit in January and lifted revenue and capital spending estimates to record levels.