Hon Hai Precision Technology (Foxconn) has reiterated a flat revenue growth outlook for both the second quarter of 2022 and the full year, while order visibility has also strengthened compared to March.
Speaking about the prospects for second-quarter 2022, Foxconn chairman Young-Way Liu said the entire supply chain has been affected by the pandemic to varying degrees, but Foxconn has been able to minimize the impacts thanks to nearly 50 years of management experience and a strong supply chain. Although a portion of its production has been impacted, its main production has maintained normal operations. As a result, second-quarter performance is expected to remain flat.
In terms of individual products, Liu noted demand for cloud products, especially servers, is very strong, driven by the strong growth of its major cloud service provider (CSP) customers. Both on-quarter and on-year growth are expected to see solid growth. Prospects for cloud products are the most promising in 2022.
Looking at 2022 overall, Liu believes that although supply and demand are currently up against several challenges (such as geopolitical issues, the pandemic, and inflation), visibility for Foxconn’s four main products is slightly up from March, but the overall outlook remains relatively flat.
Foxconn’s gross margin in the first half of 2022 will be better than the same period in 2021, Liu said. He is also confident that overall performance in 2022 will outperform that of 2021.
Regarding the development progress of Foxconn’s “3+3” strategy, Liu said the company has already signed three agreements for asset purchasing, outsourced manufacturing, and joint venture development with US-based electric pickup truck maker Lordstown Motors. Lordstown is expected to begin producing electric pickups and supply components at its Ohio factory in the third quarter. Both parties will also develop new future models based on the MIH platform.
Liu also revealed that related orders from startup electric vehicle (EV) maker Fisker will enter SOP in 2024, becoming the main vehicle model produced at the Ohio plant.
Liu emphasized that semiconductors are an important link in extending the vertical integration strategy in the EV industry. Foxconn will build a comprehensive silicon carbide (SiC) ecosystem, from upstream design, wafer manufacturing, and power modules to downstream applications through partnerships and its own in-house production capacity.
Liu also touched up LiDAR, another important development in the automotive field and a key component for autonomous driving. Foxconn is expected to showcase a comprehensive integrated advanced driver assistance system (ADAS) and software application solution at this year’s Hon Hai Tech Day 2022. This type of LiDAR is not only superior to standard LiDAR, it is also cost-competitive. Customers are already discussing its application possibilities.
Foxconn’s first-quarter 2022 revenue reached NT$1.4 trillion (US$46.9 billion) for an on-year increase of 4%. Gross profit amounted to NT$84.8 billion for an on-year increase of 8%. Net operating profit reached NT$36.7 billion for an on-year increase of 33%, while gross margin amounted to 6.02%.