Apple supplier expects limited impact from microchip shortage

The chairman of Apple supplier Foxconn expects his company and its clients will face only “limited impact” from a microchip shortage that has affected several global manufacturers in recent months.

“Since most of the customers we serve are large customers, they all have proper precautionary planning,” said Liu Young-way, chairman of manufacturing conglomerate.

“Therefore, the impact on these large customers is there, but limited,” he said at a press conference on 20 February.

Liu added that 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 microchip shortage had caused manufacturing delays for all manner of goods, including new generation smartphones and laptops.

The problem had several causes, including bulk-buying by US sanctions-hit Chinese tech giant Huawei Technologies, a fire at a Japanese factory, coronavirus-related lockdowns in Southeast Asia, and a strike in France.

The fire at the Nobeoka City factory of semiconductor producer Asahi Kasei Microsystems (AKM) broke out at its semiconductor manufacturing plant on 20 October, and took three days to put out.

While no one was hurt, reportedly 400 employees were evacuated when it began. Parts of the building structure, including sections of walls and the roof, collapsed on 22 October after another fire broke out on the factory’s fifth floor.

Meanwhile, employees at all French sites of manufacturer STMicroelectronics went on strike over a pay dispute, exacerbating supply difficulties.

Foxconn said it is s looking at other areas for growth, including in electric vehicles , and Liu said their electric vehicle development platform MIH now had 736 partner companies participating.

He expects to have two or three models to show by the fourth quarter, though he did not expect electric vehicles to make an obvious contribution to company earnings until 2023.

Liu also said the company was still looking for semiconductor purchase opportunities in Southeast Asia after failing to win a bid to take over a stake in Malaysia-based 8-inch foundry house Silterra.

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