Why Foxconn expects an “unprecedented” first quarter despite pandemic disruptions

Foxconn, the world’s largest contract assembler of consumer electronics, expects a strong start to 2022, despite any pandemic-related disruptions, thanks to strong orders for electric vehicles and hardware for the future of the metaverse.

The company, founded by Taiwanese billionaire Terry Gou, said it had revenue of NT$5.9 trillion (about $213 billion) last year, up 11% from the previous year. last year. Foxconn Chairman Young Liu said at the company’s year-end party on Sunday that the first quarter of this year could be “unprecedented.”

Foxconn’s revenue spike in 2021 came “despite” a return of the pandemic, according to the company’s statement. Its factories should step up employee vaccinations and separate large groups of workers to control outbreaks, said Liang Kuo-yuan, president of the Yuanta-Polaris Research Institute think tank in Taipei.

Foxconn, best known for assembling Apple iPhones, has made inroads into the electric vehicle market over the past year and is expected to see related revenue gains in 2022, analysts said. Electric vehicles are gaining popularity around the world thanks to an overall drop in prices, coupled with stricter environmental regulations in several countries.

Last year, Foxconn struck deals with Los Angeles startup Fisker and global auto giant Stellantis to manufacture electric cars in the United States and co-develop automotive chips, respectively. In China, the world’s largest market for electric vehicles, Foxconn is working with Chinese automaker Zhejiang Geely Holding Group. In its home market, Foxconn has invested in the Taiwanese maker of electric scooters.

“In the first quarter of 2021, all of this wasn’t ready,” says Tracy Tsai, Taipei-based research vice president at research firm Gartner. “It’s a new product, so it needs to get stronger year by year.”

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To support these and other deals, Foxconn has invested in related wafer technology, Liang says.

Foxconn, formerly Hon Hai Precision Industry, is also ready to manufacture hardware, such as wearable displays, for people’s entry into the metaverse, Liang believes. The Metaverse is a nascent but rapidly growing virtual world where people work and play through avatars, often spending real money on their virtual excursions.

Foxconn’s president was quoted as saying that the metaverse requires “high computing power”. To this end, experts from the Hon Hai Research Institute will be trained in quantum computing technology, the Taipei-based Central News Agency reported this month.

An easing of the global chip crisis should give Foxconn an additional boost this quarter, analysts said. “They should have a good year overall,” Liang said. “They have the technology for everything, and once something happens, they can just come in and do it.”

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