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Apple vendor Foxconn says a “limited impact” of chip shortages is expected

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Apple chairman Foxconn’s chairman said on Saturday that he expects his company and its customers to face a “limited impact” from a chip shortage that has rocked the global automotive and semiconductor industries. “Because most of the customers we serve are large customers, they all have proper precautionary planning,” said Liu Young-Wei, chairman of the manufacturing conglomerate officially known as Hon Hai Precision Industry Co. Ltd. “Therefore, the impact on these large customers is there, but limited,” he told reporters.

Liu said he expects the company to do well in the first half of 2021, “especially after the pandemic calms down and demand is still sustained.”

The global spread of COVID-19 increase demand for laptops, game consoles and other electronics. This prompted chipmakers to redistribute capacity away from the automotive sector, which expected a sharp decline.

Now carmakers such as Volkswagen AG, General Motors Co and Ford Motor Co have reduced production as chip capacity has shrunk.

Counterpoint Research says the shortage has also spread to the smartphone sector, as application processors, display driver chips and power management chips are facing a crisis.

However, the research firm predicts Apple it will face minimal impact due to its large size and the tendency of suppliers to prioritize it. Apple is Foxconn’s largest customer.

Foxconn is looking at other areas for growth, including electric vehicles (EVs), and Liu said their EV MIH development platform already has 736 partner companies.

He expected to have two or three models to show by the fourth quarter, although he did not expect electric cars to clearly contribute to the company’s profits by 2023.

Liu also said the company is still looking to buy semiconductors in Southeast Asia after failing to win an offer to acquire a stake in the Malaysian-based 8-inch Silterra foundry.

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