Foxconn chairman says expects 'limited impact' from chip shortage on
clients
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[February 20, 2021] TAIPEI
(Reuters) - The chairman of Apple Inc supplier Foxconn said on Saturday
he expects his company and its clients will face only "limited impact"
from a chip shortage that has rattled the global automotive and
semiconductor industries.
"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.
Liu said he expected the company to do well in the first half of 2021,
"especially as the pandemic is easing and demand is still being
sustained."
The global spread of COVID-19 has increased demand for laptops, gaming
consoles, and other electronics. This caused chip manufacturers to
reallocate capacity away from the automotive sector, which was expecting
a steep downturn.
Now, car manufacturers such as Volkswagen AG, General Motors Co and Ford
Motor Co have cut output as chip capacity has shrunk.
Counterpoint Research says the shortage has extended to the smartphone
sector, with application processors, display driver chips, and power
management chips all facing a crunch.
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A sign of Foxconn is seen inside its office building in Taipei,
Taiwan November 12, 2020. REUTERS/Ann Wang
However, the research firm predicts Apple will face a minimal impact, due to its
large size and its suppliers' tendency to prioritise it. Apple is Foxconn's
largest customer.
Foxconn is looking at other areas for growth, including in electric vehicles (EVs),
and Liu said their EV development platform MIH now had 736 partner companies
participating.
He expected it would have two or three models to show by the fourth quarter,
though did not expect EVs to make an obvious contribution to company earnings
until 2023.
Liu also said the company was still looking for semiconductor fab purchase
opportunities in Southeast Asia after not winning a bid to take over a stake in
Malaysia-based 8-inch foundry house Silterra.
(Reporting by Ben Blanchard and Jeanny Kao; Writing by Josh Horwitz; Editing by
William Mallard and Ana Nicolaci da Costa)
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