Apple supplier Foxconn posted a better-than-expected increase in net profit in the second quarter. The background was strong demand for cloud products and consumer electronics, including smartphones, the Taiwan-based largest contract manufacturer said on Wednesday. Net profit rose 12 percent to 33.29 billion Taiwan dollars (1.1 billion euros).
That beat analysts’ forecasts, who had expected an average increase to $31 billion Taiwan. For the third quarter, however, Foxconn expects the pandemic-induced boom in consumer electronics to subside.
Sales of cloud and networking products should remain strong, so the group reiterated its target for full-year revenue growth, despite geopolitical uncertainties. However, Foxconn did not want to make a more precise forecast.
Semiconductor deal failed
In recent years, the group has expanded beyond its core smartphone business into areas such as chips and electric vehicles. However, according to a report in the Financial Times, Foxconn’s participation in Chinese semiconductor maker Tsinghua Unigroup is meeting resistance from Taiwanese security authorities. The $800 million investment “definitely will not materialize,” the newspaper quoted a senior Taiwanese government official as saying on Wednesday.
Foxconn announced in July that it owns about 20 percent of the Chinese semiconductor conglomerate through a number of subsidiaries. Taiwan’s cabinet committee has yet to formally review the investment, an insider told the FT. Increasing tensions in the region have made such participation more difficult. Taiwan’s National Security Council wants to block the deal.
Foxconn said it was in talks with government officials. Tsinghua Unigroup did not immediately respond to a request from Reuters for comment.
Taiwan, the world’s largest contract electronics manufacturer, is concerned about China’s recent ambitions in the semiconductor sector. The Taiwanese government has banned companies from building manufacturing facilities in China to avoid moving their most advanced technology abroad. At the same time, Taiwan is under increasing pressure from China, which considers the democratically governed island its own territory. Tensions in the region escalated recently after US House Speaker Nancy Pelosi traveled to Taiwan despite threats from China.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
