Taiwan’s Foxconn, Apple’s biggest iPhone assembler and the world’s largest contract electronics maker is facing a shortage of chips for AI servers. Though Foxconn expects its business this year to be “slightly better” than last year, is facing AI server chip shortage. “We did pretty well last year, although we had a rather large write off in the first quarter,” Foxconn Chairman Liu Young-way said on Sunday, referring to a write down related to its 34% stake in Japanese electronics maker Sharp Corp.
Foxconn chips shortage
“As for this year’s outlook, I think it might be slightly better than last year,” Liu told reporters on the sidelines of the company’s annual employee party in Taipei.
Foxconn in November said it had a “relatively conservative and neutral” outlook for 2024.
Demand for artificial intelligence (AI) servers will “of course” be good, but global economic uncertainty given geopolitical problems will affect consumer product demand, he added.
“One (market segment) will be good, but very many others – uh-oh.”
Apple iPhone sales drop
On Thursday Apple forecast a drop in iPhone sales and targeted overall revenue $6 billion below Wall Street expectations as its China business took a hit.
The results confirmed some analysts’ concerns that the Apple iPhone sales drop reflects that it is losing ground in the key Asian market where. This is seen as consumers are buying foldable phones and phones from Huawei, powered by a China-made chip.
Foxconn Q4 earnings
Foxconn Chairman Liu said production capacity for chips for servers is limited, even with strong demand.
“When it comes up to keeping up with demand, perhaps there need to be new factories,” he added.
Foxconn, formally called Hon Hai Precision Industry Co Ltd, will report Q4 earnings next month when it will also update its outlook for this year. Foxconn releases January sales data on Monday.
Foxconn stock update
Foxconn’s shares have slid 2.4% so far this year, compared with a 0.7% gain for the broader market.
