Thu, Sep 14, 2017 - Page 1 News List

Suppliers under pressure on iPhone release

BLEAK PREDICTION:Pegatron and Wistron shares dropped deeper than other Apple suppliers likely based on the poor sales outlook for the iPhones which they assemble

By Lauly Li  /  Staff reporter

Components suppliers to Apple Inc, such as Pegatron Corp (和碩), Largan Precision Co (大立光) and Catcher Technology Co (可成), saw their shares come under pressure from investors in Taipei trading yesterday, following the launch of the new iPhone, market analysts said.

The TAIEX fell 0.73 percent to close below the 10,600-point mark, dragged down by selling that was focused on the tech sector, especially the Apple supply chain, Taiwan Stock Exchange data showed.

“It has almost become routine practice for investors to take profits from supply-chain stocks the day after the launch of a new iPhone in the past few years,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Vincent Chen (陳豊丰) said by telephone.

Largan, a camera lens supplier to Apple, dropped 3.84 percent to NT$5,635, while casing supplier Catcher contracted by 4.96 percent to NT$335, stock exchange data showed.

However, Chen said Pegatron and Wistron Corp (緯創) appeared to drop deeper than their peers, which reflected investors’ concerns about the long-term sales outlook of the new handsets.

Pegatron, which is widely believed to be the main assembler for the 4.7-inch iPhone 8, plunged 3.05 percent to NT$89, its lowest price in the past five months, Taiwan Stock Exchange data showed.

Wistron, which shares orders of the 5.5-inch iPhone 8 Plus with Hon Hai Precision Industry Co (鴻海精密), fell by 3.36 percent to close at NT$25.9.

Compared with Pegatron and Wistron, Hon Hai, which solely assembles the 5.8-inch iPhone X, dipped 1.28 percent to NT$115.5.

Chen said Hon Hai’s role as sole assembler gives it an advantage to emerge among its competitors in terms of the sales outlook for the remainder of the year, given that the iPhone X specification upgrades are more appealing than that of the iPhone 8 and iPhone 8 Plus.

Apple’s edge-to-edge OLED display, 3D TrueDepth camera and facial recognition capabilities are exclusive to the iPhone X, while the iPhone 8’s and iPhone 8 Plus’ specifications are less impressive, Chen said.

Pegatron chairman Tung Tzu-hsien (童子賢) and vice chairman Jason Cheng (程建中) yesterday declined to comment on the launch of the new handsets.

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