* Q2 profit T$33.29 bln vs T$31.02 bln market view
* Q2 revenue rose 12% to T$1.5 trln
* Sees flat growth for consumer electronics in Q3
* Sees strong growth for cloud and networking products in Q3
* Says has plan B if authorities don't approve China
TAIPEI, Aug 10 (Reuters) - Apple iPhone assembler
Foxconn gave a cautious outlook for the current
quarter after posting results that exceeded expectations, citing
slowing smartphone demand after a pandemic-fuelled boom.
The comments from the Taiwanese company, the world's largest
contract electronics maker, echo those from other Asian tech
firms that have warned of a drop in sales of smartphones, TVs
and gadgets as surging inflation and deepening concerns of a
recession crimp consumer spending.
Foxconn has been largely shielded from these demand problems
so far as the popularity of iPhones has endured among a loyal
and relatively affluent customer base, and it said on Wednesday
that rising inflation will only have a limited impact on mid- to
high-end smartphone demand in the rest of the year.
Still, Foxconn forecast flat revenue growth in its consumer
electronics business including smartphones for the quarter
ending September, signalling that demand for some devices was
slowing after "significant growth" in the second quarter, when
the business accounted for half of its overall revenue.
"On the whole, we are slightly more cautious about the third
quarter, but compared to the same period last year, we could
still see growth," the company's Chairman Liu Young-way told a
"We will closely watch developments in geopolitics,
inflation, and the pandemic."
Like other global manufacturers, Foxconn, formally called
Hon Hai Precision Industry Co Ltd, has dealt with a severe
shortage of chips that hurt production as bottlenecks from the
pandemic lingered and the Ukraine war further strained
On Wednesday the company said the second half of the year
would look better than the first if there were no major
China's Lenovo Group the world's biggest PC maker
whose results are a good indicator of consumer electronics
demand, posted on Wednesday its smallest revenue growth in nine
quarters as sales of gadgets eased after being driven by the
pandemic, and it was also hit by COVID-19 lockdowns at home.
Both Foxconn's net profit and revenue for the April-June
quarter rose 12%, and Liu said the numbers show its "resilience"
amid supply chain problems.
"Our customers, and ourselves, we are all large global
technology companies, and have relatively strong supply chain
management abilities. This advantage allows us to minimise the
impact of any materials shortages," Liu said.
Foxconn said it anticipates revenues for cloud and
networking products to be strong in the third quarter. It
reaffirmed its stance from last month that overall revenue this
year will grow, rather than a previous guidance of remaining
It did not provide a numerical outlook.
With a view to the future, Foxconn has diversified into
areas including electric vehicles and semiconductors.
Speaking about Foxconn's $800 million investment in
embattled Chinese chipmaker Tsinghua Unigroup last month via a
subsidiary, Liu said Foxconn will follow the law and if
authorities did not approve the investment, it had a back-up
He did not elaborate on the plan.
Taiwan, which has become increasingly cautious about China's
ambition to boost its chip industry, wants to persuade Foxconn
to unwind the investment, the Financial Times reported on
The democratically governed island, which China claims as
its territory, prohibits companies from building their most
advanced foundries in China and has proposed new laws to prevent
what it says is China stealing its chip technology.
Taiwan has faced days of Chinese military drills since last
week when U.S. House Speaker Nancy Pelosi visited the island,
despite warnings from Beijing against a trip.
Foxconn shares closed 0.9% higher ahead of the earnings
release, versus a 0.7% drop in the broader market. They
have risen 5.8% so far this year, giving the company a market
value of $50.3 billion.
(Reporting by Yimou Lee and Sarah Wu; Writing by Sayantani
Ghosh; Editing by Muralikumar Anantharaman)