(Yicai Global) March 31 -- Shares of Hon Hai Precision Industry slid after annual profit fell more than expected at Apple’s biggest supplier as the pandemic squeezed margins and it warned of ongoing parts shortages amid the global chip shortfall.

The company [TPE:2317], better known as Foxconn, closed down 4.3 percent today at TWD124 (USD4.35), after earlier dropping as much as 5 percent. The stock is still up 77 percent over the past 12 months.

Net profit at the world’s biggest electronics contract manufacturer fell 12 percent to TWD101.7 billion (USD3.6 billion) in the year ended Dec. 31, Taipei-based Foxconn said yesterday. Analysts polled by S&P Global Market Intelligence had expected TWD106.28 billion.

The company’s gross margin fell to 5.65 percent last year, down from 5.91 percent the year earlier. But it may climb to 7 percent this year, Chairman Young Liu said at an online investor conference yesterday.

Revenue rose 0.3 percent to TWD5.36 trillion (USD187.9 billion) over the year plagued by supply chain disruptions around the world. The fourth quarter of 2020 showed signs of recovery with a 15 percent jump in revenue from a year ago.

Liu said he was “cautiously optimistic about the information and communication technology industry.” Component shortages may affect less than 10 percent of the firm’s shipments, but could drag on into next year, he said.

The iPhone assembler will also decide by June whether to build its first electric vehicle plant in the United States or Mexico, Liu said. It will work with other companies on battery, electrical machinery, electronic control, and software toward the plan, he said.

Foxconn has been dabbling in new energy vehicles for many months. Last October, it introduced MIH, an open software and hardware platform for electric vehicles. In January, it penned a deal with startup Byton to mass-produce the Nanjing-based company's first vehicle, M-Byte.

Mass production of M-Byte should begin next year, Liu said on the call. Moreover, Foxconn will roll out an electric vehicle prototype and two passenger vehicle prototypes this year. It will also produce US-based Fisker’s Pear vehicle.

Editor: Emmi Laine