Chips Crunch Still ‘Biggest Limiting Factor’ in Sales Growth: Flex CEO

Constraints from the “ongoing shortage” in semiconductors remain “the biggest limiting factor” in revenue growth for contract manufacturer Flex, said CEO Revathi Advaithi on an earnings call Wednesday for fiscal Q1 ended July 1. “We currently expect this trend to continue,” she said. Q1 revenue grew 16% year over year to $7.35 billion, “driven by continued strong demand and our ability to deliver in spite of ongoing component constraints,” she said. “Not surprisingly, we are seeing indications of slowing in some consumer-related markets. However, we have been anticipating this change, and it is within our current expectations for the full year.” Flex in recent years has “purposely deemphasized the most volatile and shorter-cycle businesses,” said Advaithi. Its consumer device revenue went from about 17% of its mix in 2018 “to now only 10% in fiscal 2022,” she said. “The macro environment remains highly uncertain, and none of this is to say we're immune to it, but we have effectively navigated the challenges over the last couple of years, and we have continued to adapt and improve.”