Apple supplier Foxconn said it was confident supply chains would recover in the second half of this year, sounding a rare note of optimism that China’s Covid-19 lockdowns would ease along with their economic impact.
“We are quite confident in the stability of our supply chain for the second half of this year,” Young Liu, Foxconn chair, told the company’s annual shareholder meeting.
Liu’s comments come as authorities in Shanghai, China’s commercial capital, said they would allow public transport to resume after nearly two months of strict lockdowns and told local authorities that residents in low-risk areas should not be restricted from leaving their compounds “for any reason”.
But reopening in cities across China has been faltering and analysts have pointed out that the high transmissibility of the Omicron coronavirus variant means future flare-ups of the disease cannot be ruled out.
Foxconn this month reported its highest first-quarter net income in eight years as it gained market share from rivals hit hard by China’s brutal pandemic lockdowns.
On Tuesday, the world’s largest contract electronics manufacturer said that the impact of lockdowns on its own production had been limited by its use of a “closed loop” system where workers remain on site, but that demand had suffered due to the pandemic-related restrictions.