Apple supplier declares more supply problems.
Among the best and most efficient suppliers of Apple is Foxconn, which yesterday declared the many problems they have had. Just as Apple has warned in its quarterly fiscal report, Foxconn also expects lower revenue in the third quarter. This continues to occur in various Apple suppliers, regarding the slowdown in demand. Meanwhile, other problems continue to rise, the main one being the supply chain.
Meanwhile, the president of Foxconn is still hesitant about this situation and the future of the market. So this company for the moment will be looking for better options in other areas so as not to have total dependence on the assembly of phones.
Foxconn and the problem with the supply chain
Regarding this issue, Reuters has reported that Foxconn is nervous about the next quarter. The company already reported that this month’s revenues in both the technology sector and smartphones are not going to improve anytime soon. Especially now with the growing inflation monopolizing the economic sector, the rapid drop in registered income and to be registered is inevitable.
Other economic aspects also have to do with this situation. But for now Foxconn has had no choice but to try to get on with the component shortage problem. It is not the only one affected, since this problem goes much further, being already a global crisis.
Faced with this situation, it is necessary to emphasize the importance of the global shortage problem, since Foxconn, the company par excellence as a manufacturer of electronic devices, is declaring that it is facing one of the most serious situations due to lack of chips, being another company affected at a global level. world. This problem damages the entire production line at the root, if from the manufacturer to the consumer it is seeing complications reaching Apple’s main supplier.
The most worrying statement is the one made by the president of the Taiwanese company, Liu Young-Way, because in his words: there is a lot of uncertainty due to the current market situation. This statement was made outside of the income reports. The president added to the factors the health situation due to COVID-19, the different geopolitical disputes and the current world inflation, etc.
Apple had already made its own prediction, which was not favorable. Therefore, Foxconn for now has to take action against this, looking for other areas and thus reduce dependence on this sector. This movement by Foxconn is natural, since just over half of the income comes from the technology sector and its assembly. The company is expected to try to invest in electrical automotive manufacturing, as the business is around 34,000 billion dollars by 2025.
Apple’s original plan was to avoid a full shutdown given the COVID-19 situation. Foxconn had to act on this somehow, so it hired more workers ahead of any government move. The assembly of the iPhone 14 required a good number of extra workers. However, the planning had multiple failures that forced the so-called iPhone City to close.
This topic had many aspects to highlight given unfortunate situations due to China’s strict sanitary measure. For example, the famous case of Macbook Pro workers vandalizing part of the COVID-19 vicinity, as the mandatory lockdown got out of hand at the Chinese plant.
Although Apple has anticipated this type of problem, the monetary, labor and social cost it represents is not yet evident. Economically, this type of situation results in around 8,000 billion dollars for the company, that only in this quarter. This issue is too delicate, but compared to others that are of equal or greater importance, there is the supply and demand that the iPhone 14 will have.
The assembly problem with China
Apple has had an assembly relationship with China for some time now, which has become a long-term problem. Despite the excellent campaign to diversify contract companies for assembly and other processes, Apple has not been able to completely detach itself from the Chinese country.
After 5 long years, the company has been criticized for still maintaining its almost extreme dependence. Even Foxconn currently and during this time has had to diversify the areas it works. For example, the new income plan that means 9,000 billion dollars with a company in Arabia.
The Wall Street Journal reported that Foxconn is in the process of finalizing an offer from the Saudi government regarding the manufacturing process of chips for electric vehicles, as well as other products.