Industry analysts are putting their psychic hats on and see bad times ahead for those tech suppliers in Taiwan who supply bigger companies, like Apple, with parts. A source told the
Nikkei Asian Review that these vendors are seeing slower orders for the second half of the year. For example, TSMC, the company that will produce 100% of the A10 chips for the
Apple iPhone 7 and
Apple iPhone 7 Plus, sees chip shipments in the second half of this year declining to reach only 70% to 80% of last year's deliveries.
Apple is TSMC's largest customer, accounting for 16% of the firm's $25.93 billion USD in revenue that it rung up last year. That resulted in profits of $9.83 billion USD for the chip manufacturer. But one person who is said to be familiar with TSMC's operations says that revenue growth will be up just 4% this year, and operating profits will be flat all because of the slow down in orders from Apple. TSMC itself has predicted 5% to 10% year-over-year growth in revenue and operating profits for 2016, although most analysts say that growth at that level can not be attained by TSMC this year.
A drop in demand for Apple's next iteration of the iPhone is expected as Apple is rumored to be
putting off a major redesign of the handset until 2017. Ming-Chi Kuo, the highly accurate Apple analyst who toils for KGI Securities, says that the next iPhone model
will not have many "attractive selling points."Apple's shares hit a new 52 week low today at $89.47, and are currently trading at $90.07. The most valuable company in the world has seen its valuation drop under $500 billion to $493.7 billion. Right behind Apple is Google parent Alphabet, valued at $488.9 billion.
source:
NikkeiAsianReview via
SeekingAlpha
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