Shares in Asian suppliers and assemblers for Apple Inc fell yesterday after several component makers warned of weaker than expected results, leading some market watchers to call the peak for iPhones in several key markets.
Following a poor forecast earlier this month, analysts and investors voiced concern over the state of Apple’s business, contributing to growing worries that iPhone sales were stagnating and could hurt suppliers.
Fresh warnings on Monday from screen maker Japan Display Inc, British chipmaker IQE PLC and Lumentum Holdings Inc, the main supplier of the Face ID technology in the latest generation of iPhones, hurt technology stocks in Asia yesterday.
Photo: Reuters
In Taiwan, Hon Hai Precision Industry Co Ltd (鴻海精密) dropped more than 3 percent and rival Pegatron Corp (和碩) fell more than 5 percent, but later recouped losses. They count Apple as a major customer.
Taiwan Semiconductor Manufacturing Co (台積電) fell 2.6 percent, while Flexium Interconnect Inc (台郡) was down 1.5 percent.
The TAIEX was down about 1.6 percent.
“Apple’s iPhone weakness has been a long-term issue for the Asia supply chain,” said Arthur Liao (廖顯毅), an analyst at Fubon Securities Co (富邦證券) in Taipei. “For Apple, the iPhone shipment has reached its peak. For tech suppliers facing the future, they have no other big client like Apple.”
The California-based tech giant’s shares on Monday fell to their lowest level in more than three months.
A media report last week saying the iPhone maker had told its smartphone assemblers to halt plans for additional production lines dedicated to its new lower-priced iPhone XR had pressured supplier stocks.
Analysts said the lack of technological breakthroughs had put a cap on demand, which would persist in the coming quarters.
“With no new technology in sight next year for the supply chain, this is not ideal for the companies involved,” said Nicole Tu (塗景婷), a Taipei-based analyst at Yuanta Investment Consulting Co (元大投顧). “Up through the first half of 2019 we likely won’t see any breakthrough.”
Lumentum on Monday slashed its profit and revenue forecast for the current quarter, while IQE said that current-year results would be lower. Japan Display lowered both sales and margin outlook for the year as well.
Among other Apple suppliers in Asia, Hong Kong-based acoustic components maker AAC Technologies Holdings Inc (瑞聲) slumped more than 6 percent.
South Korean electronic parts suppliers Samsung Electro-Mechanics Co Ltd, Apple’s supplier of multi-layer ceramic capacitors, dropped more than 5 percent, while LG Innotek Co Ltd plunged 9.5 percent.
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