Sections

ideals
Business Essentials for Professionals



‘Limited Impact’ On Clients Of Chip Shortage, Expects Foxconn Chairman


02/20/2021


‘Limited Impact’ On Clients Of Chip Shortage, Expects Foxconn Chairman
There will only be “limited impact” to the clients of Apple’s largest contract manufacturer and chip suppliers Foxconn because of the chip shortage that had severely impacted the automotive and semiconductor industries all over the world, said the chairman of the Taiwanese company.
 
“Since most of the customers we serve are large customers, they all have proper precautionary planning,” said Liu Young-way, chairman of the manufacturing conglomerate formally known as Hon Hai Precision Industry Co Ltd
 
“Therefore, the impact on these large customers is there, but limited,” he told reporters.
 
The Taiwanese company is expected to perform well in the first half of the current year “especially as the pandemic is easing and demand is still being sustained”, Liu said.
 
Since the beginning of the Covid-19 pandemic, people all over the world have been forced to mostly stay indoors because of restrictions on movement imposed to prevent the spread of the pandemic which has resulted in an increase in demand for laptops, gaming consoles, and other electronic products that are used to work from home and get entertain at home. This sudden growth in demand of the electronic products has resulted in chip manufacturers being forced to reallocate their manufacturing capacity away from the automotive sector since that sector was expecting a sharp drop in demand and consequently manufacturing.
 
The current shortage in chops used in the auto industry has forced production cuts for some of the major car makers of the world including Volkswagen AG, General Motors Co and Ford Motor Co,
 
The current shortage of chips has also now started to affect the smartphone sector w2iht shortages being faced of application processors, display driver chips, and power management chips, according to a recent research from Counterpoint Research.
 
However, the impact of the chip shortages will be at a minimum for Apple because of its large size and the tendency of the company’s suppliers to prioritize chip production for the company, the research firm also predicted.
 
There are other areas such as electric vehicles (EVs) that Foxconn is also looking to expand into to enhance revenues. Currently there are 736 partner companies participating in the EV development platform MIH of the company, Liu said.
 
Foxconn expects to be able to be ready with at least two or three models to show by the end of the fourth quarter of the current year, Liu said. He however said that the company does not expect any obvious contribution to the company’s earnings from the EVs till 2023.
 
After the company failed to win a bid to take over a stake in Malaysia-based 8-inch foundry house Silterra, Foxconn is currently still looking for semiconductor fab purchase opportunities in Southeast Asia, Liu also said.
 
(Source:www.economictimes.com)