Foxconn expecting strong earnings because of iPhone 12, will continue US investments

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Main iPhone supplier Foxconn says that it will continue to invest in the United States as it sees continued demand for the iPhone 12 in the holiday quarter.

Foxconn saw a profit of $1.08 billion for the July-September quarter, nearly identical to the figures it saw for the same quarter a year earlier. The flat growth was likely due to the coronavirus pandemic causing costly delays in product release schedules.

Foxconn Chairman Liu Young-way said that the company has observed "stronger than expected" demand for smartphones and servers in 2020, especially for the iPhone 12. Both Liu and analysts expect the trend to continue. They anticipate consumer electronics revenue to rise as much as 10% in the fourth quarter and rise next year.

Foxconn will likely assemble all of the iPhone 12 Pro and iPhone 12 Pro Max models, as well as 70% of all other models, according to analysts. The projected demand for the new smartphone has encouraged the company to continue investing in its United States projects.

Furthermore, according to Reuters, Foxconn isn't done investing in the United States. The company plans to continue investing in the troubled Wisconsin factory effort going forward.

"We continue to push forward in Wisconsin as planned, but the product has to be in line with the market demand," Chairman Liu Young-way said at an investor conference. "There could be a change in what product we make there."

He later told reporters that the company could potentially create products related to servers, telecommunications, and artificial intelligence — which would be another shift in the company's plans for the site. The company had initially planned on making large-screen displays for TVs and then later proposed shifting production to smaller LCD screens.

In 2019, Foxconn's $10 billion U.S. investment did not create enough jobs in Wisconsin to earn the company tax credits. This marked the second year that the company missed out on the tax break.

 

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