Foxconn Photo: VCG

Foxconn, the world's largest electronic devices manufacturer and a major Apple supplier, reported on Sunday that its October sales dropped by 4.56 percent year-on-year. 

Analysts said the company's sales drop is mainly due to weak consumer demand across the world, but traditional customers' worries caused by its supply chain shift outside the Chinese mainland also negatively affect the company's operations.

Foxconn, formally called Hon Hai Precision Industry Co Ltd, said its business revenue last month reached T$741.2 billion ($23.09 billion), the second highest ever for October.

Revenue in its smart consumer electronic devices, including smartphones, saw "significant" growth month-on-month as new products drove demand ahead of the "Double 11" shopping event in November and Thanksgiving holidays in the US, according to a report on the company's website.

Foxconn's fall in sales is mainly due to low demand of consumer electronics across the world, and the trend may continue until the second half of 2024, Ma Jihua, a Beijing-based industry analyst, told the Global Times on Monday.

Ma said Foxconn's moves of shifting supply chains to regions including Southeast Asia and India negatively affected its operations, as customers and would refrain from cooperating with it due to supply chain instability.

"Foxconn should consistently take root in the Chinese market for more opportunities in the long term," he said.

With the second half of the year a traditional peak season for the ICT industry, company operations are expected to tick up. Significant growth outlook in the fourth quarter compared to the third quarter remains unchanged, the company said, without elaborating.

The Global Times recently reported that mainland tax authorities have begun to probe Foxconn's tax compliance in Guangdong and Jiangsu provinces, among other provinces. And, the natural resources department in the mainland has conducted on-site investigations into land use practices by Foxconn in Henan and Hubei provinces.

In response to media speculation linking the investigations to the company's founder Terry Gou, who is running as a candidate in the 2024 elections for Taiwan's regional leader, Zhu Fenglian, spokesperson for the Taiwan Affairs Office of the State Council said at a recent press conference that the probes are normal law enforcement actions, and that the mainland will continue to support Taiwan-based businesses and enterprises in investing and developing in the mainland.

While enterprises from the island of Taiwan share the dividends of growth and achieve substantial development in the mainland, they should also bear corresponding responsibility and play an active role in promoting peaceful development of cross-Straits relations, Zhu said.