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Foxconn sees ‘barely higher’ 2024, warns on AI chip shortage

2024.02.04 03:58


© Reuters. FILE PHOTO: Foxconn emblem is seen on this illustration taken, May 2, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

TAIPEI (Reuters) – Taiwan’s Foxconn, Apple (NASDAQ:)’s greatest iPhone assembler and the world’s largest contract electronics maker, expects its enterprise this 12 months to be “slightly better” than final 12 months however is going through a shortage of chips for AI servers.

“We did pretty well last year, although we had a rather large write off in the first quarter,” Foxconn Chairman Liu Young-way mentioned on Sunday, referring to a writedown associated to its 34% stake in Japanese electronics maker Sharp (OTC:) Corp.

“As for this year’s outlook, I think it might be slightly better than last year,” Liu informed reporters on the sidelines of the corporate’s annual worker occasion in Taipei.

Foxconn in November mentioned it had a “relatively conservative and neutral” outlook for 2024.

Demand for synthetic intelligence (AI) servers will “of course” be good, however international financial uncertainty given geopolitical issues will have an effect on client product demand, he added.

“One (market segment) will be good, but very many others – uh-oh.”

Apple on Thursday forecast a drop in iPhone gross sales and focused general income $6 billion beneath Wall Street expectations as its China enterprise took a success.

The outcomes confirmed some analysts’ issues that the corporate’s signature product is dropping floor in the important thing Asian market the place customers are shopping for foldable telephones and telephones from Huawei, powered by a China-made chip.

Liu mentioned manufacturing capability for chips for servers is restricted, even with sturdy demand.

“When it comes up to keeping up with demand, perhaps there need to be new factories,” he added.

Foxconn, formally known as Hon Hai Precision Industry Co Ltd, will report fourth quarter earnings subsequent month when it can additionally replace its outlook for this 12 months. It releases January gross sales knowledge on Monday.

Foxconn’s shares have slid 2.4% to date this 12 months, in contrast with a 0.7% achieve for the broader market.

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