13 Feb 2024 -
 General

Foxconn faces semiconductor shortage amid ‘AI chip race’

foxconn

Foxconn, a major player in electronics manufacturing and Apple’s primary iPhone producer, has issued a warning regarding a shortfall in AI chips crucial for server production. Despite anticipating a slight improvement in business compared to the previous year, Foxconn Chairman Liu Young-way highlighted the challenge posed by the scarcity of AI chips, stressing the potential need for new manufacturing facilities to meet demand.

Speaking at Foxconn’s annual employee event in Taipei, Young-way acknowledged the tight supply chain dynamics, stating, “When it comes up to keeping up with demand, perhaps there need to be new factories.” He underscored the limited availability of NVIDIA AI chips, essential components for AI servers, predicting that only a select few companies would secure sufficient supply this year.

This announcement coincides with projections from research firm GlobalData, identifying 2024 as the year of the ‘AI chip race’. The report forecasts a shift towards alternative chip architectures, signalling a potential decrease in Nvidia’s dominance in the market.

Despite challenges, Foxconn remains optimistic about its performance, despite an expected dip in first-quarter revenue compared to the previous year. The company attributes this decline to seasonal factors, reiterating its resilience in navigating traditional off-peak periods.

With Foxconn’s revenue for January reaching $16.6 billion, the second-highest in its history for that period, the company demonstrates its continued prominence in the global electronics manufacturing landscape.

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