Foxconn Faces Logistics Disruptions in China

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Foxconn Faces Logistics Disruptions in China
13 May 2022
4 min read

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News Synopsis

The world's largest iPhone assembler, Foxconn Technology Group, said it faces logistics disruptions and other challenges due to strict Covid-19 restrictions in China.

Most of Foxconn's factories in China operate under a bubble-like regime, Young Liu said on Thursday. He said Taiwan-based contract manufacturers rely on supply chain management expertise to continue production during the Covid outbreak.

Foxconn's largest customer, Apple Inc, said last month that the outbreak of Covid in China could reduce sales by $8 billion this quarter. CEO Tim Cook said Apple's supply shortage was primarily due to Shanghai, many of which have been closed for more than a month and logistics have been disrupted in neighboring areas.

In March, Foxconn was forced to shut down its Shenzhen factory, another manufacturing unit for Apple products, after the coronavirus outbreak in a southern city. In the first quarter, Foxconn's sales were up 4.5% year-on-year and net income was up 4.6% to $29.45 billion, or about $989.6 million.

Foxconn is also planning to invest $100 million in a joint venture with Lordstown, under which the companies plan to mass-produce electric pickup trucks from the second half of 2022. Chairman Young Liu has said that it would cost roughly $500 million for Foxconn to alter the production lines. 

TWN In-Focus