Foxconn, Apple's biggest supplier, is the latest company to be impacted by the global shortage of microchips

Foxconn, Apple's biggest supplier, is the latest company to be impacted by the global shortage of microchips
Visitors are seen at a Foxconn booth at the World Intelligence Congress in TianjinReuters
  • Foxconn's chairman warned the company is starting to see the impact of the chip shortage.
  • The Apple supplier says it expects to ship 10% fewer products due to the lack of chips.
  • The company's chairman also provided more details on its electric car plans.

Foxconn, one of Apple's biggest suppliers, warned Tuesday that the company expects a 10% decline in exports due to the global computer chip shortage.

It's the latest of many signs that major electronic companies like Apple and Samsung might face some serious repercussions from a global shortage of semiconductor chips.

The shortage was largely caused by the pandemic, and made worse by the Texas freeze. Increased demand for work-at-home devices, alongside manufacturing shutdowns have largely driven the global deficit.

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Computer chips are used in most major electronics, including anything from phone and gaming consoles to cars and computers. Unable to get their hands on enough of them, many automotive companies have already been forced to shut down plants and prioritize which models to produce due to the shortage.

Apple may face similar challenges going forward. Though Foxconn's Chairman Liu Young-way said in February that the chip shortage will have a "limited impact" on the tech giant, he seems to have changed his tune.


Liu said companies will likely see the impact of the chip shortage into the second quarter of next year.

"The pandemic and the material shortage could impact out performance going forward," Liu told analysts and investors on a conference call Tuesday. "That's why we are being cautious."

Foxconn is not only a primary Apple supplier, but also works with numerous major companies, including Google, Microsoft, and Hewlett Packard.

During the meeting, Foxconn also announced plans to invest $1 billion in exploring electric vehicle production in North America. Liu said the company is looking at two possible locations for a manufacturing plant, including Wisconsin and Mexico.

In February, Foxconn announced plans to partner with US electric car startup Fisker to build a car by 2023. Liu confirmed the plans during the earnings call.


"We will decide one place for the pilot run and another for mass producing 10,000 cars per month," Liu said.

In March, Bloomberg reported Apple may be planning to make its own electric car with one of its manufacturers, including Foxconn and Magna International.