What you need to know
- Apple supplier Foxconn has posted profits of around $1 billion.
- It smashed forecasts and estimates as it continues to capitalize on the demand for devices driven by working from home.
Apple's largest supplier Foxconn, maker of devices like the iPhone 12, has smashed expectations and recorded a profit of around $1 billion for Q1 of 2021.
Taiwan's Foxconn, which assembles iPhones for Apple, on Friday reported better-than-expected first-quarter profit amid the work-from-home trend spurred by the COVID-19 pandemic that has stoked demand for electronic devices.
Officially known as Hon Hai Precision Industry Co, the world's biggest contract electronics maker said January-March net profit surged to T$28.2 billion ($1 billion) from T$2.1 billion in a pandemic-hit first quarter a year earlier, beating an average forecast of T$24.41 billion compiled from 11 analysts' estimates by Refinitiv.
Last week Foxconn reported its best-ever April thanks to very strong iPhone 12 shipment numbers, as well as strong demand for the PS5, which combined to delivered 13.44% growth on March and 31% year on year.
It comes following a slight decline on profits for the final quarter of 2020.
Q2 might not be so kind to Foxconn, with the company predicting in March that a global chip shortage could see shipments fall by 10%, from that report:
The supply of Apple products could potentially be impacted by the global chip shortage.
As reported by Nikkei, Foxconn has announced that it may experience a 10% decline in shipments due to the current shortage of chips available to the manufacturer.
"The [supply in the] first two months of this quarter was still ok, as our clients are all very big, but we started to see changes happening this month," Chairman Young Liu said in an earnings call on Tuesday.
Foxconn, like Apple, has cashed in on very strong demand for the iPhone 12. The best iPhone in recent memory, Apple has seen strong demand and bumper sales across the board, save for the iPhone 12 mini. Despite this Apple is expected to give the 'mini' iPhone one more run with the iPhone 13 before dropping it next year.