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Apple supplier declares more supply problems

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Among the best and most efficient suppliers of apple is Foxconn, which yesterday declared the many problems they have had. Just as Apple has warned in its quarterly fiscal report, Foxconn also expects revenue to decline in the third quarter. This continues to happen in various Apple suppliers, regarding the slowdown in demand. Meanwhile, other problems continue to rise, the main one being the supply chain.

Meanwhile, the president of Foxconn still has doubts about this situation and the future of the market. So this company for the time being will be looking for better options in other areas so as not to be totally dependent on phone assembly.

Foxconn and the problem with the supply chain

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On this subject, the medium Reuters has reported that Foxconn is nervous about the next quarter. LThe company has already reported that this month’s revenues in both the technology sector, such as smartphones, are not going to improve soon. Especially now, with the growing inflation monopolizing the economic sector, the rapid drop in registered and unregistered income is inevitable.

In this situation, other economic aspects also have to do with it. But for now Foxconn has had no choice but to try to get on with the component shortage problem. It is not the only one affected, as this problem goes much further, being already a global crisis.

Given this situation, the importance of the global shortage problem must be stressed, since Foxconn, the company par excellence as a manufacturer of electronic devices is declaring that it is facing one of the most serious situations due to lack of chips, being another company affected worldwide. This problem rootly damages the entire production line, if from the manufacturer to the consumer you are seeing complications reaching Apple’s main supplier.

The most worrying statement is the one made by the president of the Taiwanese company, Liu Young-Way, because in his words: there is a lot of uncertainty due to the current market situation. This statement was said outside of the income reports. The president added to the factors the health situation due to COVID-19, the different geopolitical lawsuits and the current world inflation, etc.

Apple’s warning

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Apple had already made its own prediction, which was not at all favorable. So Foxconn has to take action against this for now, seeking other areas and thus reduce dependence on this sector. This movement on the part of Foxconn is natural, since little more than half of the income comes from the technology sector and its assembly. The company is expected to try to invest in electric car manufacturing, as the business is estimated at 34,000 billion dollars by 2025.

The original plan on Apple’s part was to avoid a full shutdown given the COVID-19 situation. Foxconn had to act on this somehow, so it hired more workers before any government move. The assembly of the iPhone 14 required a good number of extra workers. However, the planning had multiple failures that forced the so-called iPhone City to close.

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This topic had many aspects to highlight given unfortunate situations due to China’s strict sanitary measure. For example, the famous case of Macbook Pro workers trashing part of the COVID-19 vicinity, since the mandatory lockdown got out of control at the Chinese plant.

Although Apple has anticipated this type of problem, the monetary, labor and social cost that it represents is not yet evident. Economically, this type of situation results in around 8,000 billion dollars for the company, that only in this quarter. This topic is too delicate, but compared to others that are of equal or greater importance, there is the supply and demand that the iPhone 14 will have.

The assembly problem with China

Apple has had an assembly relationship with China for some time now, which has become a long-term problem. Despite the excellent campaign to diversify contract companies for assembly and other processes, Apple has not been able to completely detach itself from the Chinese country.

After 5 long years,The company has been criticized for still maintaining its almost extreme dependency. Even Foxconn currently and during this time has had to diversify the areas in which it works. For example, the new income plan that supposes 9,000 billion dollars with a company in Arabia.

The Wall Street Journal reported that Foxconn is in the process of finalizing an offer from the Saudi government regarding the manufacturing process of chips for electric vehicles, as well as other products.

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