Apple supplier Foxconn says chip shortage could cut shipments by 10%

Foxconn admits it is not immune to the global chip shortage.

What you need to know

• Foxconn says that the global chip shortage could impact shipments by 10%.
• The issue could affect the availability of some Apple devices.

The supply of Apple products could potentially be impacted by the global chip shortage.

As reported by Nikkei, Foxconn has announced that it may experience a 10% decline in shipments due to the current shortage of chips available to the manufacturer.

"The [supply in the] first two months of this quarter was still ok, as our clients are all very big, but we started to see changes happening this month," Chairman Young Liu said in an earnings call on Tuesday.

Foxconn is Apple's largest supply chain partner and a key partner in the production and assembly of the iPhone. While Apple has generally dodged the impacts of the chip shortage so far, Foxconn's admission means that could quickly change and the supply of Apple's devices could become more constrained.

Liu said Foxconn is "currently" likely to ship 10% fewer products than it had planned, without specifying the time period. Supplies for "home economy products" are particularly constrained, he added, as the pandemic has driven a rush in such orders. By contrast, "the impact on the orders that were secured a long time ago is rather limited."

The shortage is likely to extend to at least the second quarter of next year, Liu said, citing research agencies.

Today's report lines up with an earlier report from this month that also said iPhones could face disruption due to Samsung's supply chain issues. Samsung currently supplies OLED displays for the iPhone 11 and iPhone 12.

The supply crunch hitting Qualcomm will affect a wide range of smartphone makers that rely on the company for key components. Apple, which procures OLED panels from Samsung, could also face disruptions in iPhone production.

While the current chip shortage is a major issue, Apple seems to be full steam ahead with its A15 processor with production slated to begin in May.