What's going on?

Taiwanese electronics assembler and major Apple supplier Foxconn posted earnings on Tuesday that missed analysts� expectations � and warned that ongoing microchip shortages could hurt its future orders.

What does this mean?

Strong demand for Foxconn-built iPhones and home-working equipment drove last quarter�s revenue higher, but international currency swings ate into the company�s profit. As the value of the Taiwanese dollar increased relative to the American, Foxconn�s local costs increased, while the worth of its overseas sales was eroded.

But naturally forward-looking investors were more bothered by Foxconn�s unexpectedly dire predictions for the future. The company warned that the global shortage of microchips could potentially leave it unable to fulfil up to 10% of its orders this year.

Why should I care?

For markets: Tech firms struggle when the chips are down.

Semiconductor shortages were previously thought to hit carmakers hardest: they reportedly pay less for chips than technology companies and are therefore last in line. But as the world�s largest electronics assembler, Foxconn should know when tech firms are also set to miss out. That may help explain why Apple�s share price initially fell 2% on Tuesday.

Zooming out: My other car is a Foxconn.�

Taiwan�s largest firm recently announced plans to help other companies build electric vehicles (EVs) too. It�s a fast-growing market, but Foxconn may have its eye on Apple in particular. The Californian company is planning to launch its own smart cars soon, and may well need assistance with production and assembly. Foxconn has already entered partnerships with carmakers including Geely, and investment bank Morgan Stanley reckons more tie-ups are in the pipeline: it estimates Foxconn�s EV shipments could make up 10% of the global total by 2025 (tweet this).