Roger Fingas
Apple's share price dropped about three percent during pre-market trading going into Thursday on word that TSMC — the manufacturer of A-series processors for iPhones and iPads — is expecting about $1 billion less revenue for the second quarter than Wall Street forecasts.
TSMC's guidance for the quarter is between $7.8 billion and $7.9 billion, versus Street consensus of $8.8 billion. "Moving into second quarter 2018, continued weak demand from our mobile sector will negatively impact our business despite strength in cryptocurrency mining," said CFO Lora Ho in a statement seen by CNBC.
Ahead of trading opening on the NASDAQ, Apple shares fell below $175, their lowest value since Apr. 13, when shares closed at $174.73.
TSMC specifically blamed its forecast on "softening" demand for high-end smartphones, as well as conservative estimates for cryptocurrency demand. A Morgan Stanley analyst, Charlie Chan, argued that some key factors were unconfirmed order cuts for the A11 Bionic processor in the iPhone X, and "around a month's delay of Apple's new 7 nm processor to July."
Apple is a major TSMC client, especially since the former has generally abandoned Samsung as a source of A-series chips. Any change in iPhone orders can deal a blow to TSMC's finances.
Conflicting reports have emerged about whether or not Apple has encountered lower demand for the iPhone X than expected. While assembly partner Foxconn posted strong December-quarter results, and Cowen and Company has said that production figures are in line, other reports have claimed order cuts and/or that the public has had trouble swallowing the phone's $999 price.
Speculation has pointed to Apple making this fall's follow-up to the X slightly cheaper, perhaps $899. KGI analyst Ming-Chi Kuo has suggested that a new 6.1-inch LCD iPhone — shipping alongside 5.8-inch and 6.5-inch OLED models — could start at just $550.
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18 Comments
Apple stock is so sensitive to any news. It’s a zigzag. Google is more stable over times...I predict AAPL could dip as low as $140ish this year...
In December 2017 AI reported on suggestions that only Apple and Samsung might be able to push on with 7nm process chips for 2018 phones.
https://appleinsider.com/articles/17/12/13/apple-samsung-could-be-only-smartphone-makers-with-7nm-chips-in-2018
In that thread I mentioned this:
"Samsung, Globalfoundries and Intel are all trying to woo HiSilicon to be that second supplier. Rumours say Samsung is throwing OLED and other IP into the offer to sweeten the deal. The Kirin 980 is apparently very near finished"
Huawei (HiSilicon) would appear to be almost officially in the 7nm group now according to this piece:
http://playfuldroid.com/huawei-mate-20-fueled-by-kirin-980-scores-350000-on-antutu/
HiSilicon was looking to increase capacity and after releasing its 2017 numbers, unit sales showed a very healthy YoY increase.
So I doubt there has been any downward change at TSMC from HiSilicon orders unless someone has poached all their business (Samsung was trying hard, it seems).
Ah, earnings season again, and WS is all out in droves with their dunce hats.
Nothing to see here. Move along.