Foxconn, the largest assembler of Apple’s iPhones and the world’s leading contract electronics manufacturer, anticipates a modest improvement in business performance this year compared to the previous year. Despite challenges such as a shortage of chips for AI servers, Foxconn Chairman Liu Young-way expressed optimism about the company’s outlook for 2024.
Liu acknowledged the company’s resilience in the past year despite a significant write-off related to its stake in Japanese electronics maker Sharp Corp. He indicated that demand for artificial intelligence (AI) servers remains robust, but global economic uncertainties, particularly geopolitical tensions, could impact consumer product demand.
While Liu highlighted optimism for certain market segments, he acknowledged challenges in others, particularly in light of Apple’s recent forecast of a drop in iPhone sales. Apple attributed the decline to challenges in the Chinese market, where consumers increasingly opt for foldable phones and devices from competitors like Huawei.
The chip shortage for servers poses a significant challenge for Foxconn, with Liu noting that production capacity is constrained even amidst strong demand. He suggested the need for new factories to meet rising demand effectively.
Foxconn will report its fourth-quarter earnings next month, providing further insights into its financial performance and outlook for the year ahead. The company’s January sales data, to be released soon, will offer additional indicators of its performance. Despite the challenges and uncertainties, Foxconn remains a key player in the electronics manufacturing industry. However, its shares have experienced a decline this year, reflecting market concerns and broader economic factors.
As Foxconn navigates through the complexities of the market, the ability to address supply chain challenges and adapt to changing consumer intentions will be vital for sustaining growth and competitiveness in the industry. The chip shortage issue underscores the broader challenges faced by the electronics manufacturing sector, highlighting the importance of proactive measures and investments in production capacity to meet growing demand effectively.
