Foxconn January sales hit record high after production restored at world’s biggest iPhone factory

Hong Kong

Apple supplier Foxconn says its January monthly sales hit a record high as it rebounds from the disruptions caused by Covid-19 in China.

In a sales update on Sunday, the Taiwanese manufacturing company reported revenue of 660.4 billion Taiwan dollars ($22 billion) in January, up 48 percent from the same period a year earlier, and its current forecast for the month. It is the highest level. Revenues increased by about 5 percent compared to last month.

The manufacturer attributed its performance to a strong rebound at its sprawling campus in central China’s Zhengzhou.

The site, home to the world’s largest iPhone factory, was crippled by Covid-19 restrictions and worker protests late last year.

Now, operations there are “returning to normal” and product shipments have increased, Foxconn said.

The company also said that “better ingredient supply” helped boost sales.

Foxconn’s two most-watched divisions: Smart Consumer Electronics, which includes smartphones and televisions, and Computing Products, which includes laptops and tablets, both “showed strong double-digit growth.” he said.

The data underscores how Foxconn’s Zhengzhou campus, also known as “iPhone city,” is roaring back to life after a series of setbacks.

The company’s troubles began in October, when workers walked off the site over concerns about Covid-related working conditions and food shortages. Shortage of staff, later workers were offered bonuses to return.

But violent protests erupted in November, when newly recruited staff said the administration had reneged on its promises. The workers clashed with security officers, before the company eventually offered them cash to quit and leave the site.

The headache led analysts to predict that Apple would likely accelerate the diversification of its supply chain away from China.

Last week, Apple ( AAPL ) pointed to challenges in China as a key factor in its worse-than-expected earnings.

CEO Tim Cook said the company’s issues in the country hurt supplies of the iPhone 14 Pro and iPhone 14 Pro Max during the key holiday shopping season.

Foxconn has since been able to stabilize operations at its facility. Last month, Chinese state media reported that the Zhengzhou plant was almost back to normal, reaching 90 percent capacity by the end of December.

The company also expressed confidence for the road ahead. On Sunday, it said in a statement that its outlook for the first quarter would likely meet analysts’ expectations, without providing details. Analysts polled by Refinitiv expect the firm’s revenue to rise 4% in the January-March period.

Foxconn shares rose 1.9% in Taipei on Monday.

— Kay Wen Chang and Juliana Liu contributed to this report.

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