What you need to know
- Apple's main iPhone supplier Foxconn says the global chip shortage could last until the second half of 2022.
- Robust iPhone sales likely boosted Foxconn's Q3 performance.
- The company has warned revenue will fall by 15% in Q4.
Apple's main supplier of its best iPhones including the iPhone 13 has warned that the global chip shortage may endure into the second half of 2022.
As reported by Reuters:
Apple supplier Foxconn (2317.TW) forecast on Friday that a global chip shortage would run into the second half of 2022 and its fourth-quarter revenue for electronics, including smartphones, would fall more than 15%.
Foxconn reported a better-than-expected Q3, with profits jumping 20% thanks in part to strong demand for the iPhone. However, the company has warned its Q4 revenue may fall by more than 15% because of constraints. Chairman Liu Young-Way said, "regarding next year's prospects, we will be relatively cautious in our outlook."
The report continues:
As well as forecasting the slide in revenue in its consumer electronics business, which includes smartphones, Foxconn said it expected overall fourth-quarter revenue to fall between 3% and 15% in the period. Analysts predicted an 11% drop, according to a Refinitiv consensus estimate.
Analysts cited by Reuters suggest "robust" iPhone sales drove Foxconn's third-quarter business, and that the company secured more than 75% of assembly orders from Apple in the quarter. Apple itself has noted how supply issues cost the company $6 billion in the last quarter, and that things were only going to get worse ahead of Black Friday and into the holiday season.
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