Apple suppliers in China hit by fresh talk of order cuts and further decoupling between world’s two biggest economies
- The slide came after Nikkei Asia reported that Apple has notified several suppliers to build fewer components
- Mainland China remains the US tech giant’s primary production base, although it has been diversifying amid supply chain risks
Apple suppliers in China are suffering from plunges in their stock prices and potential revenue losses amid rising speculation about reduced orders for AirPods, Apple Watches and MacBooks and further US-China tech decoupling.
Luxshare Precision Co and Dongshan Precision Manufacturing Co, two Shenzhen-listed Apple suppliers, saw their share prices slump 10 per cent and 9.4 per cent respectively on Wednesday. Sunny Optical, a Hong Kong-listed smartphone camera module and lens maker, plunged 10 per cent.
The slide came after Nikkei Asia reported that Apple has notified several suppliers to build fewer components for AirPods, Apple Watches and MacBooks for the first quarter due to weakening consumer demand.
The report, which does not identify specific suppliers affected, coupled with a broader trend that Apple has been shifting part of its production out of mainland China to diversify supply chain risks, has stirred wider investor concerns about the future of Apple suppliers in China.
Goertek, an AirPods maker based in eastern Shandong province, revised its annual earnings estimates down by nearly 60 per cent last month as a result of reduced orders from Apple. Its share price fell 2.8 per cent on Wednesday in Shenzhen.
Dongshan Precision Manufacturing said in a note posted on the Shenzhen Stock Exchange’s platform that its production and operations were “normal” and orders from core customers are “stable”.