Apple turns over assembly of 5G iPhone 13 camera modules to Foxconn; chip shortage will have impact

By Scott Marlette Last updated Aug 13, 2021

Apple’s main iPhone assembler released its third quarter forecast today and it included comments suggesting that there is a shortage of components used to manufacture the upcoming iPhone 13 series. In May, Foxconn said that the time between ordering chips and receiving them (known as the lead time) was as long as one year. The longer the lead time, the harder it is to find the semiconductors sought.

Apple iPhone production could be hit by the global chip shortage

While Foxconn reported a 30% hike in second quarter profit topping the estimates made by analysts, the company said that it would have to “wait and see” whether the COVID-19 resurgence in Asia would hit its suppliers hard. And the 20% jump in Q2 revenue that the contract manufacturer reported this morning could drop to a gain of 3% to 15% overall during the current quarter, and a 15% gain in revenue attributed to consumer electronic products.

Foxconn says that iPhone 13 production could be hit by the global chip shortage

According to Reuters, Foxconn Chairman Liu Young-way says that the forecasts are based on the status of the pandemic in Asia at the moment. Discussing the supply chain for tech products on the continent, Liu said, “The epidemic situation appears to be worsening in Asia. Because Asia is the key global hub for ICT (Information and Communication Technology) components, it needs to be closely watched whether the epidemic will have an impact to the overall supply chain.”

Because many of Foxconn’s customers have plenty of clout in the tech world, the manufacturer wasn’t harmed as much as other firms during the April-June time frame. Liu did say that the chip shortage could last into the second quarter of 2022. Last month, Apple said that chip shortages had impacted production of Macs and iPads and would start reducing the number of iPhone units rolling off the assembly line.

Apple turns camera assembly over to Foxconn for the iPhone 13 line

Despite what sounds like a bearish forecast, Foxconn is expected to get a shot in the arm from assembling the iPhone 13 series. Taipei-based Fubon Securities expects the manufacturer to assemble 75% of the expected 85 million new iPhone units forecast to be delivered this year. During the first half of this year, Foxconn reported record high revenue and net profits. Chief Financial Officer David Huang credited strong demand for smartphones as the reason for such strong results.

Another report released today, this time by The Elec, says that in a change to the process used by Apple and Foxconn in the past, the latter will be responsible this year for assembling camera modules for the new iPhone models. In the past, Apple would supply Foxconn with completed modules and Foxconn would add them to the appropriate iPhone models. However, this year, in order to save some money, Apple has been purchasing pre-assembled double and triple camera modules from LG InnoTek, and Sharp, and has turned to Foxconn to assemble them.

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