TAIPEI (Taiwan News) — Hon Hai subsidiary, Foxconn Interconnect Technology (FIT), estimates consolidated losses for Q1 will range between NT$153-306 million (US$5-10 million), a dramatic reversal from profits of NT$917 million (US$30.6 million) for the same period last year, per UDN.

FIT said the primary reason for losses were additional costs of investing in digital transformation in Q1. Additionally, shipments dramatically decreased when compared with the same period last year.

Looking forward to Q2 and Q3, FIT said it was cautious about the consumer electronics industry, which is expected to decline year on year. Also, global service expansion will incur additional expenses and rising interest rates and inflation will continue to affect demand.

As for individual product lines, FIT believes that demand for global mobile phones is affected by inflation with consumers becoming cautious. However, the outlook for high-end mobile phones is still positive and the company is optimistic about entertainment-related systems and audio components.

FIT announced it will spend NT$722 million (US$162 million) to purchase 186.7 acres of land in Telangana, India, for the construction of factories, R&D centers and dormitories. This acquisition is to facilitate operations in areas associated with electric vehicles, audio, 5G AIoT (the combination of Artificial Intelligence (AI) and the Internet of Things (IoT), and other businesses.