TAIPEI (Reuters) – Taiwan’s Foxconn, Apple’s largest iPhone assembler and the world’s largest contract electronics maker, expects this year’s results to be “slightly better” than last year, but it expects its results for AI servers to be “slightly better” than last year. We are facing a chip shortage.
Foxconn chairman Liu Yongwei said on Sunday, referring to writedowns related to his 34% stake in Japanese electronics maker Sharp, saying: “Last year was pretty strong, but we recorded quite a large writedown in the first quarter.” ” he said.
“As for the outlook for this year, it may be slightly better than last year,” Liu told reporters on the sidelines of the company’s annual employee party in Taipei.
Foxconn said in November that it had a “relatively conservative and neutral” outlook for 2024.
He added that demand for artificial intelligence (AI) servers will “of course” be good, but uncertainty in the global economy given geopolitical issues will impact demand for consumer products.
“One (market segment) would be good, but there are so many others. Hmm.”
Apple on Thursday predicted a decline in iPhone sales as its China business has been hurt, and targeted total sales $6 billion below Wall Street expectations.
The results lead some analysts to believe the company’s flagship product is losing ground in key Asian markets, where consumers are buying flip phones and Huawei phones with Chinese chips. Confirmed my concerns.
Liu said that even with strong demand, production capacity for server chips is limited.
“When it comes to meeting demand, we will probably need a new factory,” he added.
Foxconn (officially known as Hon Hai Precision Industry Co Ltd) is scheduled to report its fourth quarter results next month, at which time it will also update its outlook for this year. Sales data for January will be released on Monday.
Foxconn stock is down 2.4% since the beginning of the year, while the broader market is up 0.7%.
(Reporting by Ben Blanchard; Editing by Lincoln Feast.)
