Australia’s Macquarie Securities has downgraded its stock rating for Hon Hai Precision Industry Co (鴻海精密) to “neutral” from “outperform,” citing weaker-than-expected demand for Apple Inc’s newest version of the iPhone.
The brokerage also lowered its target price on Hon Hai stock to NT$90 from NT$120, amid growing concern over the poor demand for the iPhone 5 expected during the first half of next year and in view of the slumping demand for the iPad tablet, which it said was a result of the iPad mini’s cannibalization.
Hon Hai, the flagship unit of Foxconn Technology Group (富士康科技集團), assembles iPhones and iPads for Apple.
“We believe the market’s expectations of both products are too high and expect Wall Street to lower their forecast over the coming months,” Taipei-based Macquarie Securities analyst Daniel Chang (張博淇) wrote in a report dated Thursday.
Macquarie also expects iPhone 5 shipments during the fourth quarter of this year to touch 44 million units, which is lower than an earlier forecast of 48 million units.
It also expects iPhone 5 shipments to drop by between 35 and 40 percent sequentially to between 26 million and 28 million units during the first quarter of next year, with the figure slipping further to 22 million units in the second quarter of next year.
The feeble demand could also be a result of less differentiated designs and the shortening gap between Apple and its rivals, given that various new models are expected to be launched during the first half of next year by Apple’s competitors, Chang said.
Hon Hai, Apple’s main manufacturer, could see its operating margins negatively affected during the first six months of next year due to a low shipment forecast for the high-margin iPhone 5, Chang said.
In a separate report, US bank Citigroup Inc maintained its “buy” rating on Hon Hai and its target price of NT$132 for the stock, saying the Taiwanese electronics maker could enhance its bargaining power with Apple as it supplied more components for the iPhone 5.
Citigroup now forecasts total iPhone shipments in the first quarter of next year to total about 45 million units, higher than its original estimate of 40 million units.
Hon Hai shares closed down 4.69 percent at NT$91.5 on Friday in Taipei.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
COLLABORATION: Softbank would supply manufacturing gear to the factory, and a joint venture would make AI data center equipment, Young Liu said Hon Hai Precision Industry Co (鴻海精密) would operate a US factory owned by Softbank Group Corp, setting up what is in the running to be the first manufacturing site in the Japanese company’s US$500 billion Stargate venture with OpenAI and Oracle Corp. Softbank is acquiring Hon Hai’s electric-vehicle plant in Ohio, but the Taiwanese company would continue to run the complex after turning it into an artificial intelligence (AI) server production plant, Hon Hai chairman Young Liu (劉揚偉) said yesterday. Softbank would supply manufacturing gear to the factory, and a joint venture between the two companies would make AI data
The Taiwan Automation Intelligence and Robot Show, which is to be held from Wednesday to Saturday at the Taipei Nangang Exhibition Center, would showcase the latest in artificial intelligence (AI)-driven robotics and automation technologies, the organizer said yesterday. The event would highlight applications in smart manufacturing, as well as information and communications technology, the Taiwan Automation Intelligence and Robotics Association said. More than 1,000 companies are to display innovations in semiconductors, electromechanics, industrial automation and intelligent manufacturing, it said in a news release. Visitors can explore automated guided vehicles, 3D machine vision systems and AI-powered applications at the show, along
RSS