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Foxconn Forecasts Strong Iphone 12 Demand Next Quarter

Foxconn Forecasts Strong Iphone 12 Demand Next Quarter
There will be strong demand for the new iPhone 12 during the holiday quarter, forecast Apple supplier Foxconn while also stressing that its process of investments in the United States will continue according to schedule. The company also said that it is looking to make new products in the country.  
The $10 billion investment that Foxconn had made in 2019 in the US state of Wisconsin was not enough to earn tax credits because not enough jobs were created, the state government said last month. This was the second year that such tough targets as set by President Donald Trump had been missed by the company.
This factory had turned into a symbol of failed promises in Midwestern states for many. These states were crucial in the 2016 election victory of Trump but voted for Democrat Joe Biden last week. Trump is seeking some recounts.
The investment plan of the company was not dependent on who the US president was, Foxconn said on Thursday. The option of building a new production line there was however being explored by the company.
"We continue to push forward in Wisconsin as planned, but the product has to be in line with the market demand ... there could be a change in what product we make there," Chairman Liu Young-way said at an investor conference.
Young-way later told reports that products related to servers, telecommunications and artificial intelligence would be the likely new products.
Initially at the Wisconsin factory, it had intended to make advanced large-screen displays for TVs. But the company had later announced its intention of manufacturing smaller liquid crystal display screens.
Near flat third-quarter profit was reported on Thursday by Foxconn, which was formally known as Hon Hai Precision Industry Co Ltd. That however beat estimates of analysts as the demand for telecommuting devices was strong during the coronavirus-induced work-from-home trend.
According to calculations based on nine-month figures, the company had made net profit of T$30.8 billion ($1.08 billion) for the July-September quarter compared to T$30.7 billion for the same period a year earlier.
In comparison, estimates of analysts compiled by Refinitiv had pegged the number at T$28.61 billion.
There was a 7 per cent drop in revenue in its third quarter as its clients delayed product launches, said the company’s Chief Financial Officer David Huang.
But for both smartphones and servers, the company still saw "stronger than expected" demand, Liu said and added that the shipments for Apple's new iPhone 12 were strong which helped to support revenues during the quarter.
In the coming months, this trend is expected to continue according to Liu and analysts. Analysts, including those from Taipei-based Fubon Research, said that Foxconn would most likely be able to assemble all premium models as well as 70 per cent of other models.
A growth of 10 per cent in consumer electronic product revenue in eth fourth quarter as well as dur4ing next year is expected by the company, Foxconn said.

Christopher J. Mitchell

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