Foxconn, the Taiwanese multinational electronics manufacturer and the primary assembler of Apple’s iPhones, has projected a business outlook for 2024 that is “slightly better” than the previous year. However, the company’s Chairman, Liu Young-way, cautioned about a shortage of chips for AI servers.
Speaking at the company’s annual employee party in Taipei, Liu acknowledged the challenges faced by Foxconn in the previous year, which included a substantial write-off related to its stake in Japanese electronics maker Sharp Corp during the first quarter. Despite these challenges, Foxconn is optimistic about the current year.
“We did pretty well last year, although we had a rather large write-off in the first quarter,” stated Chairman Liu Young-way. “As for this year’s outlook, I think it might be slightly better than last year.”
While Foxconn had previously expressed a “relatively conservative and neutral” outlook for 2024, Liu noted the potential impact of global economic uncertainty due to geopolitical problems, affecting consumer product demand. He emphasized that while the demand for artificial intelligence (AI) servers is expected to be robust, other market segments may face challenges.
“One (market segment) will be good, but very many others – uh-oh,” Liu commented.
The warning on AI chip shortages aligns with a broader industry concern, with Liu stating that production capacity for chips for servers is limited even with strong demand. He suggested the need for new factories to keep up with the growing demand for AI-related components.
Apple’s recent forecast of a decline in iPhone sales has added to the industry’s apprehensions. The Chinese market, in particular, is witnessing increased interest in foldable phones and devices from Huawei, powered by domestically manufactured chips.
Foxconn, formally known as Hon Hai Precision Industry Co Ltd, is set to release its January sales data on Monday and will report fourth-quarter earnings next month, providing a more comprehensive update on its outlook for 2024. Despite the challenges, Foxconn remains a key player in the global electronics manufacturing landscape.