Like other global manufacturers, the Taiwanese firm has
grappled with a severe shortage of chips, which has hurt smartphone production
including for its major client Apple, partly due to COVID-19 lockdowns in
China.
But the company said in a statement late on Monday that June
sales jumped 31 percent from a year earlier to a record high for the month,
thanks to appropriate supply chain management and rising sales of consumer
electronics. Smartphones make up the bulk of its revenue.
Foxconn's better-than-expected June sales come at a time
when investors are concerned about slowing tech demand during a downturn in
major markets due to high inflation and the war in Ukraine.
Chip stocks across the world tumbled on Friday after memory
chip maker Micron Technology forecast on Thursday significantly
worse-than-expected revenue for the current quarter and said the market had
"weakened considerably in a very short period of time."
Foxconn said it was optimistic about its business in the
third quarter, adding it could see "significant growth" compared with
a year earlier.
For 2022, Foxconn said the outlook has improved compared
with earlier expectations for no growth, without providing details.
The company, formally called Hon Hai Precision Industry,
said it has seen double-digit yearly growth in sales from servers and
telecommunications products so far this year.
The company has said that COVID-19 controls in China only
had a limited impact on its production as it kept workers on-site in a
"closed loop" system.
Analysts at Daiwa Capital Markets in Taipei said in a report
that demand for servers from US-based cloud service providers helped propel
double-digit growth for the sector. They expected Foxconn's operating profit to
grow 12-19 percent this year.
Morgan Stanley analysts said Foxconn's upbeat guidance for
the third quarter showed that strong demand for cloud servers and iPhone
assembly will continue.
The company's shares rose about 3 percent in Tuesday morning
trade, outperforming the broader market which was up around 1 percent. They
have dropped nearly 1 percent so far this year, giving the firm a market value
of $46.52 billion. © Reuters