Why Foxconn Expects An ‘Unprecedented’ First Quarter Despite Pandemic Disruptions

Foxconn, the world’s largest contract assembler of consumer electronics, expects a strong start to 2022, despite any pandemic-related disruptions, thanks to strong orders for electric vehicles and hardware for the metaverse future.

The company, founded by Taiwanese billionaire Terry Gou, said it made NT$5.9 trillion (about $213 billion) in revenue last year, up 11% from the previous year. Foxconn Chairman Young Liu said at the company’s holiday party on Sunday that this year’s first quarter could be “unprecedented.”

Foxconn’s 2021 revenue spike came “despite” a return of the pandemic, the company statement says. Its factories are likely to step up employee vaccinations and separate large groups of workers to control outbreaks, says Liang Kuo-yuan, president of the Yuanta-Polaris Research Institute think tank in Taipei.

Foxconn, best known for assembling Apple’s iPhones, has been making inroads in the electric vehicle market over the past year and should see related income gains in 2022, analysts say. Electric vehicles are gaining global popularity on an overall drop in prices, coupled with tougher environmental regulations in multiple countries.

Last year, Foxconn made deals with Los Angeles startup Fisker and global car giant Stellantis to make electric cars in the U.S. and co-develop automotive chips, respectively. In China, the world’s biggest electric vehicle market, Foxconn is working with Chinese automaker Zhejiang Geely Holding Group. In its home market, Foxconn invested in Taiwanese electric scooter maker.

“In the first quarter of 2021, they didn’t have all this ready,” says Tracy Tsai, Taipei-based research vice president at research firm Gartner. “It’s a new product, so that’s got to get stronger year on year.”

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To back up those deals, among others, Foxconn has made investments in related wafer technology, says Liang.

Foxconn, formally Hon Hai Precision Industry, is also ready to make hardware, such as wearable displays, for people’s entry into the metaverse, Liang believes. The metaverse is a nascent but fast-growing virtual world where people work and play through avatars, often spending real money on their virtual excursions.

Foxconn’s chairman has been quoted as saying the metaverse requires “high computing strength.” To that end, the Hon Hai Research Institute experts will get trained in quantum computing technology, Taipei-based Central News Agency reported this month.

An easing of the global chip crunch should give Foxconn an extra boost this quarter, analysts say. “They should have a good overall year,” Liang says. “They have technology for everything, and once something comes up, they can just get in and do it.”