Taiwan-based component suppliers are bracing for a drop in orders this quarter as demand for Apple’s iPhones weakens, with Q1 shipments forecast to fall 12-20 per cent year-on-year to 50-54 million units.
Analysts expect orders for iPhone components to decline 10-30 per cent this quarter, DigiTimes reported.
Contract manufacturers have already reported sharp decreases in revenue. Foxconn, Taiwan Semiconductor Manufacturing Company (TSMC) and Largan Precision saw revenue fall between 8 per cent and 30 per cent month-on-month in December, DigiTimes said.
OEM iPhone orders reportedly totaled more than 75 million units in Q4, which led to a large gap between end-market sales and orders to OEM suppliers.
Japan’s Nikkei newspaper said last week that Apple is expected to cut production of the iPhone 6s models by 30 per cent in Q1 due to mounting inventories.
Foxconn, the largest assembler of iPhones, denied reports that it was giving workers in China an early start to the annual Chinese New Year holiday after Apple cut back on orders due to falling sales. Pegatron, another iPhone assembler, said its employees in China would have the usual holiday break.