Apple warns supply chain of 20% drop in orders of iPhone parts
Apple shares then fell in US pre-market trading, as well as those of Europe-based suppliers such as AMS
London — Apple shares and Europe-based suppliers declined after a report that the technology giant had warned its supply chain of a drop of about 20% in new iPhone component orders.
Apple fell 2.1% in US pre-market trading, after its Frankfurt-listed shares also lost as much as 2.1%.
Supplier AMS dropped as much as 6.7%. Other European semiconductor stocks including Dialog Semiconductor, STMicroelectronics and Infineon Technologies all slipped after the Nikkei said that Apple told its supply chain to prepare about 20% fewer components for iPhones debuting in the latter half of 2018, compared with 2017’s orders, citing people in the industry it did not identify.
Apple’s US shares are up about 14% so far in 2018, while European suppliers have had mixed fortunes. Dialog Semi is down 42% in 2018 after Apple, its biggest customer, decided to scale back orders.
Apple’s sprawling supply chain comprises hundreds of companies and it can be difficult to glean an overall picture of demand from speaking to individual firms. Apple CEO Tim Cook has also warned investors against picking up cues from disparate data points.