Foxconn says normal supply chain is one the right track

Foxconn Technology Group, the world’s largest contract electronic maker and one of Apple’s major suppliers, said on Tuesday that the production is on the right track to return normal in the second half of the year as Shanghai’s COVID-19 lockdown appears to be easing.

“We are quite confident in the stability of our supply chain for the second half of this year,” Foxconn chairman Liu Young-way said in the company’s annual shareholder meeting.

The Shanghai government will allow all residents in ‘low-risk’ areas to return to work from Tuesday.

Foxconn is aiming to fill the global chip shortage that has forced carmakers to halt production and hurt smartphone production, Liu said, adding that the company is aiming to boost its capacity to make EV chips, so that it can capture around 5% of the global electric vehicle market by the end of 2025

The company warned this month that revenue for its electronics business including smartphones could drop this quarter driven by rising inflation, low demand and escalating supply chain issues.

Foxconn suspend its operation at its factories in Kunshan started on April 20 after new Covid-19 cases were reported at the two plants, employees of the factories have been ordered to stay at dormitories inside those campuses, and be tested everyday for the Omicron variant of Covid-19.

Located in the eastern coastal province of Jiangsu, Kunshan is home to many factories operate by Taiwan-based electronics companies. Foxconn run four plants in the city, the affected plants are located at Dianfa and Fuhong in the northern part of Kunshan.

Kunshan, which has a population of 2.1 million, is about 51 kilometres away from neighbouring Shanghai. Kuaishan’s officials has imposed lockdown since the first week of April to control the spread of Omicron variant.

Foxconn set up its first factory in Kunshan in 1993 to expand business operation in the Yangtze River Delta, an economic zone that encompass areas of Shanghai, Jiangsu, and the eastern coastal province of Zhejiang.