Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), yesterday said that a global supply crunch that has hit the consumer electronics and automaking industries will worsen this quarter, after it weathered component shortages to post better-than-expected quarterly profit last quarter.
The world’s largest contract electronics manufacturer and main assembler of iPhones reported net income of NT$28.2 billion (US$1 billion) in the first quarter, beating the average NT$24.4 billion of adjusted analyst estimates.
Revenue in the second quarter will likely be steady from the previous quarter’s NT$1.35 trillion, as growth in its consumer electronics and components divisions is countered by a slowdown in its server and computer divisions, in part because of parts shortages, Hon Hai said.
Photo: Chen Rou-chen, Taipei Times
“Component shortages in the second quarter will be more severe than the first quarter,” Hon Hai chairman Young Liu (劉揚偉) said on a conference call.
He reiterated previous comments that shortages might persist until the second quarter of next year and that the effect on its businesses would not exceed 10 percent.
While prices of components and raw materials have increased, the impact on Hon Hai will be limited, Liu said.
The firm still aims to reach gross margins of 7 percent this year, he said.
To reduce its reliance on consumer electronics, Hon Hai has been searching for new growth drivers and it has identified electric vehicles as a key emerging industry.
In the past few months, it has entered into partnerships with an array of automakers, including Zhejiang Geely Holding Group Co (吉利控股), Byton Ltd (拜騰) and Fisker Inc to boost its automotive capabilities.
Hon Hai said in a statement that it has signed a framework agreement with Fisker to establish an electric vehicle production site in the US with both sides using the MIH Open Platform promoted by Hon Hai for EV development.
Its first joint electric vehicle model, to be sold under the Fisker brand, is scheduled to enter mass production in the fourth quarter of 2023, Hon Hai said, adding that the model will carry a price tag of less than US$30,000 without subsidies included.
The joint project with Fisker is called the Personal Electric Automotive Revolution (PEAR), and progress remains on schedule, Hon Hai said.
As part of the PEAR project, Hon Hai said it and Fisker have opened offices in Taiwan and the US as part of their coordination efforts in design, engineering, manufacturing, procurement and marketing.
Fisker is expected to secure semiconductor supplies through its partnership with the company, Hon Hai said.
Additional reporting by CNA
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