Foxconn (OTCPK:FXCOF), the world’s largest contract electronics manufacturer, and Apple’s primary iPhone assembler anticipates a business outlook for 2024 that is “slightly better” than the previous year. However, the company warns of challenges, specifically a shortage of chips for artificial intelligence (AI) servers.
Chairman Liu Young-way mentioned the positive performance in the previous year, despite a substantial write-off in the first quarter related to its 34% stake in Japanese electronics maker Sharp Corp. Looking ahead, Liu shared his outlook during the company’s annual employee party in Taipei, indicating a cautious optimism for the year.
In November, Foxconn had expressed a “relatively conservative and neutral” outlook for 2024. Liu acknowledged the demand for AI servers but expressed concerns about global economic uncertainty, citing geopolitical challenges that could impact consumer product demand. He mentioned that while one market segment, such as AI servers, would likely perform well, others might face challenges.
The chairman highlighted the limited production capacity for chips dedicated to servers, even amid strong demand. He suggested the need for new factories to keep up with the rising demand for server chips.
Liu’s remarks come after Apple recently forecasted a decline in iPhone sales and targeted overall revenue $6 billion below Wall Street expectations. The challenges in the Chinese market were evident, where Apple faced tough competition from foldable phones and devices from Huawei, powered by China-made chips.
Foxconn, also known as Hon Hai Precision Industry Co Ltd, is set to report its fourth-quarter earnings next month, providing further insights into its financial performance and outlook for 2024. The company’s shares have experienced a 2.4% decline since the beginning of the year, in contrast to a 0.7% gain for the broader market (TWII).
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Author Faith Yakubu 
