(Yicai) Feb. 5 -- The artificial intelligence chip supplies of US semiconductor giant Nvidia will be insufficient this year, according to the chairman of Chinese contract manufacturer Hon Hai Precision Industry, better known as Foxconn.

Only a few leading companies will be able to obtain enough Nvidia AI chips this year, The Paper reported today, citing Liu Yangwei as saying yesterday.

Last August, Foxconn secured orders for substrates from Nvidia for its HGX AI server chips. These orders, plus those for substrates for the DGX AI server chips that Foxconn received earlier, made the Taiwan-based company Nvidia’s largest supplier of substrates for AI server chips, accounting for over 50 percent of the total.

Foxconn’s AI server business has been performing well this year, but the entire sector faces a great AI chip shortage, Liu noted. Even though the shortage is expected to ease in the second half of the year, AI chip supplies cannot catch up with the demand, he added.

Solutions to solve the shortage will only appear once the opening of new plants in the upstream reaches of the supply chain will add new capacity, Liu explained.

Geopolitics and the global economic environment will significantly influence this year’s demand for consumer electronics, Liu said, adding that Foxconn’s overall business performance is expected to slightly improve this year from last year.

Foxconn reported revenue of TWD1.54 trillion (USD47.7 billion) in the third quarter of last year, down 12 percent from a year earlier, missing market expectations. Net profit rose 11 percent to TWD43.1 billion (USD1.4 billion) in the period, which was higher than market expectations.

Editor: Futura Costaglione