July 6, 2022: -On Monday, Taiwan’s Foxconn, the world’s largest contract electronics maker, raised its full-year business outlook thanks to strong sales of smartphones and servers, despiting concerns of slowing demand because of increasing inflation.

Like different global manufacturers, the Taiwanese company has grappled with a severe shortage of chips, which has hurt smartphone production, which includes its major client Apple, partly due to COVID-19 lockdowns in China.

On Monday, the company said in a statement late that June sales increased 31% from nearly a year to a record high for the month, thanks to appropriate supply chain management and increased sales of consumer electronics. Smartphones are making up the bulk of their revenue.

Foxconn’s June sales reach when investors are concerned about slowing tech demand in a downturn in major markets because of high inflation and the war in Ukraine.

On Friday, Chip stocks worldwide increased after memory chip maker Micron Technology forecast worse-than-expected revenue for the current quarter. They told me the market had “weakened considerably in a concise period.”

Foxconn said it was encouraging regarding its business in the third quarter, adding it could see “significant growth” compared with a year earlier.

For 2022, Foxconn said that the outlook has improved compared with earlier expectations for no growth without providing details.

The Hon Hai Precision Industry company said it had seen double-digit yearly growth in sales from servers and telecommunications products this year.

The company is saying that COVID-19 controls in China only limited its production as it kept workers on-site in a “closed-loop” system.

Analysts at Daiwa Capital Markets in Taipei said a reported demand for servers from U.S.-based cloud service providers is helping propel double-digit growth for the sector. They expect Foxconn’s operating profit to grow 12-19% this year.

Morgan Stanley analysts say that Foxconn’s optimistic guidance for the third quarter showed that the healthy need for cloud servers and iPhone assembly would continue.

The company’s shares increased about 3% in Tuesday morning trade, outperforming the broader market, which was up around 1%.

They have dropped nearly 1% this year, providing the firm a market value of $46.52 billion.