Taiwan's Foxconn Posts Better-Than-Expected Second Quarter Profit

Ruben Fields
August 13, 2020

That's pretty robust talk from a company that does so much business with China, but is consistent with the kind of stuff fellow Taiwanese contract manufacturer TSMC has been saying. Liu boldly proclaimed that even though China will continue on to be a important spot for Foxconn's factories, the country's "days as the world's manufacturing unit are done".

"No matter if it's India, Southeast Asia, or the Americas, there will be a manufacturing ecosystem in each", Liu said, according to Bloomberg.

The proportion outside the country is now up by 5 percent from the earlier from 25 percent last June.

In May, Foxconn, which is the trading name of Hon Hai Precision Industry, had warned of low smartphone sales in Q2 due to the "enormous" impact on demand from the global health crisis. In the current quarter, Foxconn says it expects overall revenues to post a double-digit decline YoY, while revenues from the consumer electronics division will also decline by about 10% from a year earlier.

The Foxconn Chairman made it clear that China will still play an important role in its manufacturing operations, but it won't be as critical to its operations moving forward.

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During its quarterly earnings announcement, giant Taiwanese electronics manufacturer Foxconn revealed it's splitting its supply chain to have a separate one just for China.

As per the company report, its net profit is T$22.9 billion, around 778.54 million United States dollars and it is around 34% more than the past year.

The company managed to beat profit estimates despite revenue from its smartphone business falling 15% in the quarter because of weaker global demand.

Trump recently reignited tensions with China with two executive orders seeking to ban viral video app TikTok and messaging app WeChat, which are owned by Chinese-firms ByteDance and Tencent, respectively, from operating within the US.

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