The development of artificial intelligence technology is expected to increase the overall demand for fast-processing electronics.
Foxconn Technology Co., Ltd. (Taiwan: 2354), one of the largest global employers in the electronics manufacturing industry and a major supplier Apple Inc (NASDAQ: AAPL) announced an 11.77 percent decline in sales on an April, YoY basis. However, the company’s revenue was in line with prior estimates, at T$429.2 billion, roughly $14 billion. As smartphone shipments decline, the Taiwanese electronics giant expects its sales to decline in the current quarter.
However, the company will report first-quarter earnings results on May 11, when it is expected to issue guidance for the full year. According to the company’s unaudited consolidated monthly revenue report for April, revenue in smart consumer electronics products posted double-digit growth. Additionally, the company noted that cumulative revenue for the first four months of 2023 came in at NT$1,891.9 billion, up about 0.14 percent YoY.
“The decline in smartphone shipments during Q1 2023 is the first Q1 decline since 2019 and has been attributed to expanded inventory, weak demand and inflation. Shipra Sinha, an analyst at industry intelligence group CyberMedia Research, said the overall feature phone segment declined 19 percent, driven by muted demand and a rise in feature phones for smartphone upgrades. noted,
Foxconn Sales and Market Outlook
The company is heavily dependent on global consumption of new products, especially from Apple. As the purchasing power of the dollar declines due to high inflation, Foxconn predicts higher payouts. However, the company expects Apple’s entry into the Indian market to improve its quarterly sales. Furthermore, India is considered an emerging market with high demand for electronics for its large population, although smartphone shipments declined by 21 percent during the first quarter.
Nevertheless, Apple posted first quarter revenue of approximately $94.8 billion, down 3 percent YoY basis. Foxconn expects sales to decline in the second quarter as the global smartphone industry transitions from older to newer products. In addition, new products for Apple, among other manufacturers, are expected toward the end of the year, coinciding with holiday festivities.
Notably, Falcon’s shares were trading around NT$53.80 on Friday, having fallen nearly 3 percent in the past month. Still, it was a choppy day for the entire electronics industry, which declined nearly 3 percent on the day.
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The development of artificial intelligence technology is expected to increase the overall demand for fast-processing electronics. already, Microsoft Corporation (NASDAQ: MSTR), one of Foxconn’s major customers in North America, has made tremendous progress in AI development in collaboration with OpenAI. As a result, Foxconn is looking at profitable years ahead despite short-term headwinds.
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