Saturday , August 13 2022

Taiwan's 10-year-old iPhone boom shows signs of completion


TAIPEI – Taiwanese top technology makers made the highest sales for more than five years in October, according to a list of Nikkei's monthly list. However, analysts say this could be the culmination of a decade-long boom in the sale of the iPhone, as the slowdown in the order signals a decline in the future, one that can last until 2020.

October revenue reported by 19 Taiwanese companies that was followed by Nikkei Asian Reviev made a total turnover of 13.6% during the year, reaching 1.32 trillion new Taiwan dollars ($ 42.8 billion), the highest since Nikkei began tracking them in January 2013. Companies serve as suppliers for smartphones, personal computers and servers – the pillars of the global electronics industry.

The list includes nine key Apple vendors, many of whom contribute to leading iPhones. They led to overall performance, generating record sales of $ 1.15 trillion. Fokconn Technologi Group, which operates as Hon Hai Precision Industries, increased revenue by 21.5% during the year, while Pegatron increased 11.7%.

However, Fokonne's net income dropped below the consensus on the market for almost 12%, although NZ $ 24.87 billion for the quarter at the end of September was an increase of 18% over the previous year. The iPhone's most anticipated performance, announced on Tuesday, highlights intense competition from the maturing smartphone industry, market observers say.

Nomura Securities predicts that shipments of parts for the latest model of Apple, KSR, will fall from 40% to 50% in the period from November to January, after Nikkei Asian Reviev revealed this month that the major manufacturers of Fokconn and Pegatron were asked to cancel the additional production for highly anticipated iPhone KSR.

Kilie Huang, a Daiva Securities analyst, suggested that the supply chain came to cut orders for all new models of the iPhone in December, especially the highly anticipated KSR.

"Due to rising risks in sales, we expect further reductions in orders for the first quarter of 2019," Huang said in a recent survey.

"I always agree that October could be the highlight for the ten-year cycle of the iPhone," said Iuanta Investment Consulting analyst Vincent Chen for Nikkei Asian Reviev. "Apple would find it hard to see the starry growth again on the iPhone, unless there are some revolutionary and innovative features."

"It is likely that many smartphone revenue providers will be able to reach the peak in October and we could begin to see some suppliers report a drop in sales for this quarter during the year," said Jeff Pu, analyst at GF Securities, for Nikkei Asian Reviev.

Taivan Semiconductor Manufacturing Co., the only processor core supplier for the iPhone and Huawei premium models, raises the October sales of more than 7% over a year earlier. TPK Holding, the iPhone touch module maker, increased revenues by more than 71% during the year

But Lumentum Holdings, a key supplier of 3D sensors for iPhone Face ID technology, has cut $ 70 million from its revenue forecast Thursday from October to December on Monday. The company blamed a decline in the order of one of its biggest clients, which analysts said could only be Apple.

IPhone Japan Japan Displai also reduced its chances for a full year due to the slowdown in demand from smartphone manufacturers. This company serves as the key supplier of LCD display for Apple's cost-effectiveness iPhone KSR this year.

Largan Precision, the key lens provider for Apple and Huawei, earlier warned that revenue in November could be lower than the October figure after declining by almost 7% from last year.

Allen Horng, president of the iPhone for the production of metal frames Catcher Technologie, said that he did not rule out the correction given the dynamics of the market.

Just one month after KSR release, it may be too early to evaluate the performance of the model. It is also expected that demand for the iPhone X, which was released last year, would be weak, but more than 60 million was sold during the year. However, sales of smartphones are weak at all.

Sales of global smartphones fell by 6% compared to last year, according to IDC's research firm in the US. On the global smartphone market it grew rapidly after iPhone began in 2007, until it first appeared in 2017, and another drop is expected this year.

"The overall smartphone industry may have to wait until 2020 to see if the new 5G technology can boost new demand," Pu from GF Securities said.

Stocks in many smartphone providers have already fallen as investors predict a slowdown in demand.

In the meantime, the intensification of the trade war between Washington and Beijing continues to shadow the already slow computer market. As Nikkei Reviev announced, the lack of Intel's central processing units – caused by Intel's increasing order for iPhone modem chips – has hampered computer vendors.

Jerry Shen, executive director of Asustek Computer, the world's fifth largest computer maker, said Tuesday's visibility of lower ranks for the upcoming quarters.

"The commercial war between the two largest economies in the world has badly hit the currency markets and has really pulled our profitability," Schen said. "Current visibility for orders is as much as 20% compared to about 50% of orders in the past." The smaller the number, fewer distributors can give Asustek a clear forecast for orders.

The lack of Intel's processors will last at least until April and June 2019, he said, putting a lot of pressure on the Taiwanese PC brand. Asustek's October revenue fell more than 10% during the year.

Kuanta Computer, the world's largest laptop maker, said on Tuesday that shipments of laptops will fall by 5% from October to December from the previous quarter due to a lack of component and market insecurity. Taiwanese company produces about 40 million notebooks annually, and HP, Dell and Apple consider customers.

"After factoring in the forecast of this quarter of delivery, we now expect that the total delivery of notebooks this year will be at least 10% compared to last year," chief financial officer Elton Yang told reporters.

In June, Kuanta estimated that the yearly delivery of laptop computers would only drop one-digit percentage from 2017.

Intel said it is the first approach to the customer, which is working to match supply demand with available supplies, while the world's largest microprocessor maker adds 1.5 billion more to capital costs for 2018 to increase production capacity.

Apple said it would stop reporting unit shipments for iPhone, Mac, and iPads in early December. The change in policy has raised concerns that the US technology giant is struggling to deepen the growth of the unit's upstream hardware sales.

Written members of Nikkei Chien Chia-Hung and Hideaki Riugen contributed to this report.

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