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Foxconn warns global chip shortage will last until next year

by on12 November 2021

Tame Apple Press concerned

Foxconn has predicted that a global chip shortage would run into the second half of 2022 and its fourth-quarter revenue for electronics, including smartphones, would fall more than 15 per cent.

The Tame Apple Press seems very concerned about the announcement because Foxconn makes rather a lot of the gubbins that goes into iPhones, and Apple has already pulled back on manufacturing.

Chairman Liu Young-way said during a conference call that Foxconn was cautious about its 2022 revenue outlook, citing uncertainties surrounding the coronavirus pandemic, inflation, geopolitical tensions and supply chains.

Earlier Foxconn, the world's largest contract electronics maker, reported a 20 per cent  jump in third-quarter profit.

"If not for supply shortages prospects for the fourth quarter could have been better," he said, adding that supply of power management chips remained tight and a global chip crunch could last longer than his previous forecast of second quarter.

"Regarding next year's prospects, we will be relatively cautious in our outlook," Liu added.

Foxconn previously said it felt only a small impact from the crisis but had cautioned that rising COVID-19 cases in Asia could hurt its supply chain. read more

As well as forecasting the slide in revenue in its consumer electronics business, which includes smartphones, Foxconn said it expected overall fourth-quarter revenue to fall between three per cent and 15 per cent. The cocaine nose jobs of Wall Street predicted an 11 per cent drop.

Foxconn said it expected supply shortages in Southeast Asia to ease this month and the next.

The outlook came after a strong third quarter, in which revenue rose nine per cent on the year, helped by strong smartphone demand that remained stable despite the supply problems.

Net profit jumped to $1.33 billion.

Analysts had said they expected robust iPhone sales boosted Foxconn's business in the third quarter, and the company secured more than 75 per cent of assembly orders, including those for the latest iPhone 13. But they cautioned that supply chain problems could mute any further near-term increase in orders at Foxconn.

Foxconn said it expects its electronic vehicle (EV) business to contribute to revenue in the third quarter of 2022 when it could start production in America in a partnership with Lordstown Motors at the soonest.

Liu said he was looking to build more EV partnerships with companies in places including the Middle East, India, and Europe to "serve the local markets", but did not elaborate.


Last modified on 12 November 2021
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