Foxconn says its big iPhone factories in China are back to normal

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Models of newly launched Apple smartphone iPhone SE are demonstrated, waiting for customers to purchase, at an Apple Store, Shanghai China, 24 April 2020. *** Local Caption *** fachaoshi (Photo by Zhou Junxiang/ChinaImages/Sipa USA)

Foxconn says all of its major factories in mainland China are back to normal again after the coronavirus pandemic hobbled production earlier this year.

The Taiwan-based company, which is the main assembler of Apple products such as the iPhone and iPad, was forced to close its factories in China in late January as much of the country was locked down to prevent the spread of the virus.

Those closures affected much of Foxconn’s business. Brokerage firm KGI Asia says about 75% of the company’s production capacity is in mainland China.

Profits were hammered as a result of the closures. Foxconn, formally known as Hon Hai Precision Industry, on Friday reported first quarter operating profit of 4.5 billion Taiwan dollars ($151 million), a 72% decline from the prior year.

On a call with investors, Foxconn Chairman Liu Young-Way said that government restrictions around the world, coupled with rising unemployment, “has impacted consumer demand significantly” and the company’s smartphone and consumer products division was facing a tough second quarter.

The outlook for the second half of the year remains uncertain. “It’s still unclear for us what is going to happen,” Liu said.

The pandemic has upended global supply chains. Analysts warned this spring that Foxconn’s troubles would likely hurt some of the biggest brands in electronics. Aside from Apple, the company also manufactures products for companies such as Microsoft, Dell and Sony.

Earlier this week, Sony said supply chain disruptions hurt its electronics business in the January-March quarter. Net profit fell 86% to 12.6 billion yen ($118 million) and revenue dropped 18%.

Apple’s business, meanwhile, has held relatively steady so far. The company reported last month that revenue ticked up in the most recent quarter compared to last year by more than analysts were expecting. It was still far short of the guidance the company gave before the pandemic, though.

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