The chairman of the world’s largest manufacturer of Apple iPhones has warned that demand for smartphones will slow next year as consumers tighten their belts in a deteriorating economy, even though the company’s profits have risen significantly recently.
Young Liu, chairman of Taiwanese manufacturer Foxconn, has drawn attention to the upcoming financial quarter. He expects demand for smartphones to plateau in the near future as consumer spending declines amid widespread inflation, the geopolitical crisis and fears of an imminent recession. many first world economies.
Despite Liu’s near-term predictions being overwhelming, the mobile phone industry is reported to have experienced rapid growth in recent years, driven by unusually high consumer spending and demand for smartphones. increase. In its second quarter report this year, Foxconn reported a 12% profit increase compared to last year, well above expectations. About half of this new revenue comes from consumer electronics sales, according to Foxconn.
However, as economic conditions worsen, this unusually high demand may not last long, and there are signs that the golden age of the smartphone industry is coming to an end. Over the past few years, companies have been scrambling to secure the chips needed for consumer electronics, but the same companies are now buying less of these critical supplies, and providers expect to match. Last month, smartphone chip maker Qualcomm slashed its revenue guidance after seeing a 36% increase in sales in the previous quarter.
Liu’s statement comes on the heels of House Speaker Nancy Pelosi’s controversial visit to the Republic of China and comes at a pivotal moment for Taiwan and the smartphone industry. Taiwan is now the undisputed leader in semiconductor manufacturing, with over 50% of his world’s semiconductors being produced from his one company, Taiwan Semiconductor Manufacturing Company. Pelosi’s trip included a meeting with the head of this company. These semiconductors are key building blocks of personal electronic devices, including smartphones and computers, and the world’s reliance on small islands for these semiconductors gives Taiwan a unique advantage in geopolitical negotiations. brings.
However, as smartphone demand is expected to plateau in the near future, Taiwan’s dominance will decline slightly as the global market is better aligned to find valuable microchip and processor suppliers. But the immediate victims of this new market dynamic are companies such as Qualcomm and Foxconn, whose glory days and record sales suddenly decline as the global economy gears up for a period of contraction. is the manufacturer of
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Nicholas Dolinger is a business reporter for The Epoch Times.