© Reuters. Foxconn, the trade name of Hon Hai Precision Industry, has its logo on the company's Taipei building
By Yimou Lee and Ben Blanchard
TAIPEI (Reuters) – Apple (O 🙂 supplier Foxconn (TW 🙂 forecast strong demand for the new iPhone 12 for the holiday quarter and emphasized that the company will continue to invest in the US as planned and manufacture new products there.
Foxconn's proposed $ 10 billion investment in the state of Wisconsin did not create enough jobs in 2019 to receive tax credits, the government said last month, the second year the company has been named by President Donald Trump missed the goals advertised for great economic gain.
For many, the factory has become a symbol of failed promises in the states of the Midwest, which were key to Trump's 2016 election, but which were changed to Democrat Joe Biden last week. Trump is looking for recounts.
Foxconn said Thursday its investment plan does not depend on who the US president is. However, the possibility of setting up a new production line was examined.
"We are pushing Wisconsin forward as planned, but the product has to meet market demand … there could be a change in the product we make there," Chairman Liu Young-way said at an investor conference.
Possible new products are servers, telecommunications and artificial intelligence, he later told reporters.
Foxconn initially tried to manufacture advanced large-screen TVs at the Wisconsin site. It later said it would build smaller liquid crystal display screens instead.
Foxconn, formally Hon Hai Precision Industry Co Ltd reported nearly unchanged third-quarter earnings on Thursday, beating market estimates amid strong demand for teleworking devices amid a coronavirus-induced work-from-home trend.
According to Reuters calculations, the net profit from July to September was T $ 30.8 billion (T $ 1.08 billion), based on nine-month figures, compared to T $ 30.7 billion in the previous year.
This compared to the average of T $ 28.61 billion from 13 analyst estimates made by Refinitiv.
Chief Financial Officer David Huang said third quarter sales were 7% lower as customers delayed product launches.
According to Liu, Foxconn saw "stronger than expected" demand for smartphones and servers, with strong shipments of Apple's new iPhone 12 propping up sales.
Analysts and Liu expect this trend to continue in the coming months. According to analysts, Foxconn is likely to assemble all premium models and 70% of all other models, including those from Taipei's Fubon Research.
Foxconn expects sales of consumer electronics products to increase by around 10% in the fourth quarter and next year.
Consumer electronics, including smartphones, represented 41% of sales in the third quarter, followed by cloud computing devices with 28% and other computing products such as laptops with 24%.
Global smartphone shipments underscored weak demand during the pandemic and declined 1.3% year over year in the September quarter, data from the IDC researcher showed.
Foxconn's share price ended trading 0.4% higher before earnings release, while the broader market declined 0.3% (). It's down about 10% this year.
($ 1 = 28,5080 Taiwan dollars)