Foxconn expects a better second quarter in revenue and production, in contrast to initial expectations. Foxconn’s new announcement comes after China’s COVID-19 lockdown appears to have eased in certain states.

“We are quite confident in the stability of our supply chain for the second half of this year,” Foxconn chairman Liu Young-way said at the company’s annual shareholder meeting.

In May, the company warned that sales for its electronics business, including smartphones, could fall in the second quarter due to rising inflation, cooling demand and escalating supply chain problems, in part due to China’s COVID-19 restrictions.

After the lockdown was eased, the Shanghai government will allow all residents in ‘low-risk’ areas to return to work from Tuesday.

Foxconn, the world’s largest contract electronics maker, said its production was not significantly affected by the lockdown. However, the lockdown had instead affected demand for its products.

Despite a global chip shortage that has hit car companies and smartphone makers, Foxconn said it wants to become the first manufacturer of electric vehicles “that does not lack supplies of materials.”