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Apple moving orders from lockdown-hit factories and suppliers has led iPhone manufacturer Foxconn to report its highest Q1 net income since 2014.
The Chinese government’s zero-tolerance coronavirus lockdowns have hit around half of Apple’s top 200 suppliers in or near Shanghai. Yet Foxconn has avoided some lockdowns, even as areas close to its factories have been affected, and now has seen a marked increase in earnings.
According to the Financial Times, Foxconn has now reported its highest first-quarter net income in eight years. It’s specifically because of firms such as Apple moving their orders to Foxconn and away from lockdown-affected alternative suppliers.
“The fallout from the pandemic on logistics is sizeable,” Young Liu, chair of Foxconn, said in an earnings call on May 11, 2022. “There are many variables in the market due to the pandemic, the supply chain, geopolitics and inflation.”
“Normally under these kinds of circumstances we would be more cautious,” continued Liu. “But most recently, our visibility has improved.”
Liu means that Foxconn is optimistic following increased market share in the production of tablets and laptops, plus reportedly strong demand for servers and desktop computers.
Many of those desktop computers are made in Mexico. Liu said that the lockdown restrictions in China were having only a small effect on Foxconn because the company has production bases around the world, as well as many different plants in China.
Foxconn’s net earnings for Q1 2022 were $993.5 million, up 5% year over year.