Sales surge at Apple supplier Foxconn in January

Operations returned to normal and shipments began increasing at its Zhengzhou campus in China, a centre for iPhone production, after the lifting of Covid restrictions.

A medical worker takes a swab sample to test for Covid-19 from a worker at the Foxconn factory in Wuhan in central China's in August 2021.

Taiwan's Foxconn, the world's largest contract electronics maker and major iPhone assembler for Apple, said its revenue in January jumped over 48% from a year earlier, as it shook off Covid disruptions in China.

Revenue in January reached a record high of $22bn (€20.3bn), with operations returning to normal and shipments increasing at its Zhengzhou campus in China, a centre for iPhone production, the company said. 

Compared to the previous month, revenue was up by 4.9% with smart consumer electronics products, which includes smartphones, and computing products showing strong double-digit growth, it said.

Production of iPhones faced disruption ahead of Christmas and January's Lunar New Year holidays, after curbs to control Covid-19 prompted thousands of workers to leave Foxconn's factory lines in Zhengzhou.

Analysts say Foxconn assembles around 70% of iPhones, and the Zhengzhou plant produces the majority of its premium models, including the iPhone 14 Pro.

"Based on market consensus for first quarter 2023, January revenue came in slightly ahead. The outlook for the first quarter will likely reach market expectation," Foxconn said, without elaborating. 

Analysts expect first-quarter revenue to grow by around 4% year-on-year. Foxconn reports fourth-quarter earnings, where it will also elaborate on its outlook, on March 15.

Chinese workers in the Foxconn factory in Shenzhen, in southern China's Guangdong province. Picture: STR/AFP/GettyImages

Apple last week forecast that its revenue would fall for a second quarter in a row, but that iPhone sales were likely to improve as production had returned to normal in China after the Covid-related shutdowns. 

Apple reported sales and profits that missed Wall Street expectations driven by weak iPhone sales after the Covid lockdowns in China disrupted production of the company's biggest seller. 

 Chief executive Tim Cook said that production disruptions "lasted through most of December" but that "production is now back where we want it to be". 

Mr Cook said the lockdowns in China created a dual challenge where both supply and demand were constrained, with greater China sales falling 7% to $23.9bn. On top of supply chain problems for the iPhone, Wall Street analysts had expected iPhone sales to fall this year. 

Reuters