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Foxconn January sales hit record high after production restored at world’s biggest iPhone factory

The content originally appeared on: CNN

Hong Kong
CNN

Apple supplier Foxconn says its January monthly sales hit a record high as it bounced back from Covid-19 disruptions in China.

In a sales update on Sunday, the Taiwanese manufacturing giant reported revenue of 660.4 billion Taiwan dollars ($22 billion) in January, 48% more than the same period a year ago and its highest-ever level for that month. Revenue was up nearly 5% compared to the previous month.

The manufacturer attributed its performance to a strong rebound at its sprawling campus in Zhengzhou, central China.

The site, which is home to the world’s biggest iPhone factory, was crippled late last year by Covid-19 restrictions and workers’ protests.

Now, operations there are “returning to normal,” and product shipments have jumped, Foxconn said.

The company also said a “better components supply” helped boost sales.

Two of Foxconn’s most-watched divisions: smart consumer electronics, which includes smartphones and televisions, and computing products, which includes laptops and tablets, both “showed strong double-digit growth,” it said.

The figures underscore how Foxconn’s Zhengzhou campus, also known as “iPhone city,” is roaring back to life after the massive setbacks.

The company’s troubles started in October, when workers left the site because of concerns about Covid-related working conditions and shortages of food. Short on staff, bonuses were later offered to workers to return.

But violent protests broke out in November, when newly-hired staff said management had reneged on their promises. Workers clashed with security officers, before the company eventually offered them cash to quit and leave the site.

The headaches had led analysts to predict that Apple would likely speed up its supply chain diversification away from China.

Last week, Apple

(AAPL)
pointed to challenges in China as a key factor in its worse-than-expected earnings.

CEO Tim Cook said the company’s problems in the country had hurt its supply of the iPhone 14 Pro and iPhone 14 Pro Max during the key holiday shopping season.

Foxconn has since managed to stabilize operations at its facility. Last month, Chinese state media reported that the Zhengzhou plant was almost back to normal, reaching 90% of capacity as of the end of December.

The company also expressed confidence for the road ahead. On Sunday, it said in a statement that its outlook for the first quarter would likely meet analysts’ expectations, without providing specifics. Analysts polled by Refinitiv expect the firm’s revenue to grow 4% during the January-to-March period.

Foxconn’s shares rose 1.9% in Taipei on Monday.

— CNN’s Wayne Chang and Juliana Liu contributed to this report.