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Even Though 2024 Seems "Slightly Better," Foxconn Warns Of An AI Chip Scarcity

Even Though 2024 Seems "Slightly Better," Foxconn Warns Of An AI Chip Scarcity
The largest contract electronics manufacturer in the world and Apple's primary iPhone assembler, Foxconn of Taiwan, predicts that business will be "slightly better" this year than last, despite a lack of processors for AI servers.
Liu Young-way, the chairman of Foxconn, stated on Sunday, "We did pretty well last year, although we had a rather large write off in the first quarter," alluding to a writedown associated with its 34% holding in Japanese electronics manufacturer Sharp Corp, opens new tab.
In Taipei, Liu told reporters, "As for this year's outlook, I think it might be slightly better than last year," outside the company's annual staff celebration.
Foxconn in November said it had a "relatively conservative and neutral" outlook for 2024.
Artificial intelligence (AI) servers will "of course" be in high demand, but he noted that consumer goods demand will be impacted by geopolitical issues and global economic instability.
"One (market segment) will be good, but very many others - uh-oh."
Due to difficulties in its China business, Apple on Thursday predicted a decline in iPhone sales and set its overall revenue target $6 billion below what Wall Street had anticipated.
The findings supported some analysts' worries that the company's flagship product is losing ground in the important Asian market to foldable phones and Huawei phones with chips built in China.
Liu stated that despite high demand, there is a limited amount of chips that can be produced for servers.
"When it comes up to keeping up with demand, perhaps there need to be new factories," he added.
Next month, Foxconn, formerly known as Hon Hai Precision Industry Co Ltd, will release its fourth quarter earnings and provide an update on its prognosis for the current year. On Monday, it discloses sales figures for January.
This year, Foxconn's shares have dropped 2.4%, while the market as a whole has gained 0.7%.

Christopher J. Mitchell

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