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(Bloomberg) -- Hon Hai Precision Industry Co. warned that component shortages could persist till 2022 and affect under a tenth of its shipments, amplifying concerns that a global chip crunch could extend well beyond this year.
The assembler of most of the world’s iPhones follows fellow electronics giants that have in recent months suggested a global shortage of semiconductors could be more severe than anticipated, disrupting production of everything from cars to phones. Hon Hai made its projection, which didn’t specify the extent of the hit to its revenue, after reporting quarterly profit that disappointed investors. Its shares slid as much as 3.9% Wednesday.
Samsung this month became the largest technology giant to voice concerns about chip shortages spreading beyond the automaking industry, the first to get hit because car companies underestimated a post-Covid surge in global orders. Continental AG, Renesas Electronics Corp. and Innolux Corp. have in recent weeks warned of longer-than-expected deficits thanks to unprecedented Covid-era demand for everything from vehicles to game consoles and mobile devices.
Chairman Young Liu said that shortages appear to be growing worse and could last into next year. While Hon Hai is Apple Inc.’s most important production partner, he didn’t specify how or whether the iPhone maker would be affected. But he said that, based on what he’d read, the deficit may extend into 2022.
“The impact of shortages in the first two months of the quarter have not been too obvious, because our customers are major companies,” Liu said on a conference call. “Still we are seeing some gradual changes and are monitoring the situation cautiously. Our expectations are that there won’t be a big impact, under 10%.”
See How a Chip Shortage Snarled Everything From Phones to Cars
Hon Hai, known as Foxconn Technology Group, said net income for the quarter ended December declined 3.7% to NT$46 billion ($1.6 billion), slightly below the NT$50.2 billion average of analyst estimates.
Earnings in the previous three months had been driven mainly by new smartphones from Apple, and as demand for home computing equipment remained elevated. But the Taiwanese assembler is casting around for new growth drivers a year into the pandemic and it’s identified electric vehicles as a key emerging industry, joining a rush of technology firms seeking a foothold in auto manufacturing ahead of Apple’s own smart vehicle efforts.
Revenue in the three months ended December rose 15% to NT$2 trillion, reflecting contributions from the iPhone 12 series, whose launch last year had been delayed due to Covid-19, previously disclosed figures showed. Sales of all business lines likely grew in the first quarter, the company said in a presentation earlier this month, when it revealed record monthly sales for February.