Foxconn sees decline in sales amid Chinese investigation: Report

Foxconn, the world's largest iPhone assembler,has experienced a 4.6 per cent decline in its October sales, raising concerns about the company's future amidst a Chinese investigation.

The investigation initiated by Beijing has cast uncertainty over Foxconn's business, causing ripples in the tech industry, Bloomberg reported.

Foxconn reported a decline in revenue for October, with sales amounting to NT$741.2 billion ($23 billion). Despite this setback, the company has maintained a "significant growth outlook" for the December quarter, which is traditionally its busiest period due to the year-end iPhone shipments. Notably, Apple released its latest iPhone 15 in September.

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In a brief statement, Foxconn mentioned that "operations will ramp up sequentially", without providing further details. The ongoing investigation by Chinese authorities has added complexity to Apple's position in its largest international market and primary production base. Regulators in China are currently conducting tax audits and reviewing land use by Foxconn, as reported by state media on October 22.

The report by Bloomberg said that investor concerns have escalated regarding the prospects of Apple's iPhone sales in China, a market that constitutes approximately one-fifth of the tech giant's total sales.

The Chinese consumer economy is grappling with challenges, while U.S. businesses continue to face a hostile environment due to ongoing technology conflicts between the U.S. and China. Additionally, the surprise introduction of a smartphone by Huawei Technologies Co. featuring an advanced made-in-China 5G processor has stirred nationalist sentiment and encroached on iPhone sales.

Hon Hai, the public arm of Foxconn Technology Group, has expressed its intention to cooperate with the Chinese authorities in their investigation. However, the news of the probe has taken a toll on the company and its mainland-listed unit, Foxconn Industrial Internet Co. At one point, the combined market value of these entities plummeted by approximately $9 billion.

Separately, Taiwan has also initiated an investigation into suspected bribes associated with Foxconn founder Terry Gou's presidential campaign. This development comes as the billionaire submits signatures to run in next year's presidential election.

(With inputs from Bloomberg)

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