Foxconn Warns Chip Crisis Will Become More Severe This Quarter
Foxconn has warned investors that the global chip supply crisis will worsen this quarter after weathering shortages to post better than expected profits for Q1.
The iPhone assembler posted quarterly net income of NT$28.2 billion($1 billion) in the first quarter of 2021 beating expectations of NT$24.4 billion, reports Bloomberg. The company expects second quarter revenue to be about the same as the first quarter. Growth in its consumer electronics and components divisions will likely be countered by a slowdown in its server and computer divisions. Shortages are partly to blame.
“Component shortages in the second quarter will be more severe than the first quarter,” Chairman Young Liu said on a conference call. He reiterated previous comments that shortages may persist until the second quarter of 2022 and that the impact on its businesses won’t exceed 10%.
Last month, Liu said that the lead time for some parts is now as long as one year. To boost its semi-conductor capabilities, Hon Hai has agreed to set up a joint venture with Yageo Corp to develop chips with a selling price lower than $2.
Apple has said that it expects to lose around $3-4 billion in revenue this quarter due to supply constraints. This will mainly affect iPad and Mac inventory.
More details in the full report linked below…
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