Liu Yangwei, chairman of Hon Hai: shortage of semiconductors is expected to slow down in the second quarter of next year.

The global shortage of semiconductor chips continues, which has had an extensive impact on the industry and the market. Liu Yangwei, chairman of Hon Hai, said the impact of shortages may not slow down until the second quarter of next year.

According to bao, Taiwan media economic day, Hon Hai Group held a telephone conference this afternoon. As for the impact of shortage of semiconductors and chips on the company, Hon Hai Chairman Liu Yangwei revealed that the impact of material shortage in the first two months of the first quarter was not obvious. However, changes are gradually being seen, and Hon Hai is carefully observing that it will not have much impact on the group at present.

Liu Yangwei said that the proportion of material shortages affecting normal orders is less than 10%, but the impact of urgent orders under the epidemic is greater. He expects that the impact of material shortages on the market will not slow down until the second quarter of next year, but on the whole, Hon Hai Group is less affected by material shortages.

Liu Yangwei further pointed out that the 2.0 digital transformation of Hon Hai Group had seen a comprehensive effect last year, but the novel coronavirus epidemic and the appreciation of the new Taiwan dollar exchange rate last year masked the relevant effects. If there is no epidemic and lack of materials this year, it is expected that the group's gross profit margin will reach 7%. If the gross profit margin is raised to 10% by 2025, it will depend on digital transformation and enhance the ability of vertical integration.

Hon Hai also pointed out that manufacturing productivity in some of the group's plants increased by 30 per cent last year, and R & D productivity increased by 15 per cent while keeping product quality unchanged.