[ET NEWS] Local smartphone component suppliers for Apple will likely face much headwinds in the first half this year due largely to reduced iPhone X production, according to industry sources on March. 2.
The US tech giant recently decided to halve the production of its tenth-generation iPhone amid disappointing sales. Consequently, the amount of its orders for smartphone parts have dropped in recent weeks. The Korean parts makers have already been notified that Apple won’t be placing additional orders in the second half of the year.
Those that have been hit the hardest include Interplex, BHflex and Samsung Electro-Mechanics, which provide Apple with a rigid flexible printed circuit boardwhich connects electrical components and allows a flexible design. The circuit board is used mostly in high-end digital devices, such as smartphones and smart watches.
“Interplex will see its profits decline at a dramatic pace in the first half, compared to the second half last year,” local brokerage IBK Securities said in a report, adding “Its sales in the first half will likely be halved from the first half in 2017 due to the decreased iPhone X production.
KTB Investment & Securities said sales declines at BHflex and Samsung Electro-Mechanics are also inevitable.
Some market watchers expect the Korean suppliers to achieve a turnaround in the second half when Apple rolls out two new OLED-fitted iPhones. These models are forecast to double Apple’s components orders to some 20 million, annually.
Critics, however, say the new iPhones may also fall short of meeting the company’s expectations and therefore fail to benefit the suppliers.