The biggest assembler of iPhones has said component shortages that have plagued electronics production for more than a year are showing signs of easing, a potentially encouraging signal for manufacturers across industries.
A major improvement in parts shortages is likely in the first quarter, with “overall supply constraints” set to ease in the second half of the year, Hon Hai Precision Industry Co (鴻海精密) spokesman James Wu (巫俊毅) told a company event in Taipei yesterday.
A shortage of components, especially computer chips, has hurt production of everything from vehicles to smartphones as demand rose during the COVID-19 pandemic.
Photo: CNA
Taiwan Semiconductor Manufacturing Co (台積電) and its peers have indicated that chip supply is likely to remain tight throughout this year, while automakers, including Ford Motor Co and Toyota Motor Corp, have warned about ongoing fallout from the semiconductor crunch.
Power management chips are still in short supply, Wu said.
The firm, which buys about US$55 billion of chips per year, is striving to minimize the effects from supply-chain challenges, he said, adding that revenue this quarter is expected to be little changed from a year earlier.
In addition to being a key manufacturing partner with Apple Inc, Hon Hai makes gadgets for global brands, including Dell Technologies Inc, Sony Group Corp and Nintendo Co.
ELECTRIC VEHICLES
The company has four main business divisions: smart consumer electronics, cloud and networking technology, computing products, and components and other products.
Hon Hai is expanding into the electric vehicle (EV) sector, agreeing in October to acquire a pickup manufacturing facility in Ohio from Lordstown Motors Corp.
Production of EVs in Ohio is set to start in the third quarter of this year, Hon Hai chairman Young Liu (劉揚偉) told the event yesterday.
The company plans to unveil two EV models this year, and revenue from automotive parts is set to reach NT$20 billion (US$719 million) this year, he said.
Hon Hai said in a statement yesterday that consolidated revenue last month reached NT$445.75 billion, the second-highest total for the period and in line with company expectations.
However, last month’s figure was down 37.88 percent from the previous month and 10.89 percent lower than a year earlier, it said.
“Due to seasonality, all four major products showed monthly revenue decreases compared with December,” Hon Hai said.
ENTERPRISE SERVERS
However, “revenue from enterprise servers increased significantly as pull-in momentum continues,” it added.
Revenue last month dipped year-on-year due to a relatively high comparison base last year and the ongoing tightness in supply chains, it said.
“Overall, supply-chain tightness continues,” the company said. “However, our supply-chain management advantage helped to secure more components.”
Unfulfilled demand from last quarter, due to supply-chain tightness, is expected to sustain revenue this quarter, it said.
Hon Hai said it holds a positive outlook for its performance this quarter, expecting revenue to be flat year-on-year, despite last year’s high comparison base.
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