UPDATE 1-Foxconn expects more stable supply chain in second half of 2022

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TAIPEI, May 31 (Reuters) – Taiwan’s Foxconn, the world’s biggest contract electronics maker, said on Tuesday the second half of the year was heading “in a better direction” amid the COVID-19 lockdown in Shanghai seems to be easing.

“We are quite confident in the stability of our supply chain for the second half of this year,” Foxconn Chairman Liu Young-way said at the company’s annual meeting of shareholders.

The Shanghai government will allow all residents of “low-risk” areas to return to work from Tuesday.[nB9N2XA00P}[nB9N2XA00P}[nB9N2XA00P}[nB9N2XA00P}

Foxconn aims to become the first electric vehicle (EV) maker “not to run out of hardware,” Liu said, referring to a prolonged global shortage of chips that has forced automakers to halt production and hurt the market. production of smartphones, including for Apple Inc, a major customer. .

“A car that costs tens of thousands of dollars can’t be shipped because of a tiny chip worth fifty cents. It’s been a pain for our customers,” he said.

Foxconn aims to capture around 5% of the global EV market by the end of 2025 and said it hopes to increase its capacity to manufacture EV chips, many of which are small, low-end ICs, including including those used in power management. .

The company warned this month that revenue from its electronics business, including smartphones, could fall this quarter due to rising inflation, cooling demand and escalating supply chain issues. supply, partly due to blockages in China.

Foxconn reiterated that while China’s strict COVID-19 controls had only a limited impact on production as it kept workers on site in a “closed loop” system, demand for its products in the country has suffered because people remain locked up. (Reporting by Yimou Lee, Sarah Wu and Ben Blanchard; Editing by Kim Coghill and Edwina Gibbs)