Foxconn expects slight growth, lacks AI server chips

Foxconn, the world’s biggest contract electronics maker and Apple’s main iPhone supplier, forecasts a slight improvement in its business this year compared to last year, but is suffering a lack of chips for AI servers, as reported by Reuters on Sunday. 

Foxconn Chairman Liu Young-way said that the company performed well last year, except for a big loss in the first quarter due to its 34 per cent share of Sharp Corp., a Japanese electronics maker. 

“As for this year’s outlook, I think it might be slightly better than last year,” Liu told reporters on the sidelines of the company’s annual employee party in Taipei. 

He also said that AI servers would have strong demand, but consumer product demand will suffer from global economic uncertainty caused by geopolitical issues. 

On Thursday, Apple predicted lower iPhone sales and aimed to achieve $6 billion, which is less than what Wall Street expected, due to its struggling China business. 

The results verified the fears of some analysts that the company’s flagship product is falling behind in the important Asian market, where consumers prefer foldable phones and Huawei phones with a Chinese chip.

Liu stated that server chip production capacity was scarce despite high demand, suggesting that building new factories might be necessary to meet the demand. 

Next month, Foxconn will announce its fourth quarter earnings and its outlook for this year, and it will release its sales data for January on Monday. 

Foxconn’s shares have fallen 2.4 per cent this year, while the broader market has risen 0.7 per cent.