Foxconn posts record revenue drop when Coronavirus reduces demand for smartphones

Taiwanese tech giant Foxconn said Friday its first quarter revenues had fallen by almost 90% a year as the global pandemic disrupted operations and affected demand, particularly for smartphones.

The results show how coronavirus is hitting global supply chains and increasing costs for electronics manufacturers.

Also known by its official name Hon Hai Precision Industry, Foxconn is the world's largest contract electronics manufacturer and manufactures Apple iPhones, as well as devices for many other international brands.

In the results published Net sales from Friday from January to March fell 89% to 2.1 billion TWD (about Rs. 534 crore), while turnover fell 12% Year over year to reach 929 billion TWD (about Rs 2.35 million lakh of rupees).

According to CFO David Huang, the group's total working hours have been cut by more than 20% due to the epidemic, which has also resulted in additional costs estimated at TWD 10 billion (about 2.53 billion rupees).

Foxconn employs more than a million workers in its vast network of factories in China, where operations were affected by the deadly COVID-19 pandemic that broke out in central Wuhan before sweeping the world.

Huang said operations in China had resumed earlier than expected. The company had estimated that normal seasonal capacity would resume at the end of March.

Looking to the future, the company expects second-quarter revenues to increase by more than 15% in the first three months, but will drop by a figure each year, said President Young Liu at a conference. investors.

"With the rapid spread of the pandemic, many countries have imposed restrictions, while high unemployment rates have affected consumer demand," said Liu.