TSMC profits have seen their steepest quarterly drop in seven years. The news from Apple’s A-series chip supplier comes just twelve days before the iPhone maker reports its earnings for the same quarter (calendar Q1, Apple’s fiscal Q2).
This is not the first piece of news suggesting that iPhone sales may disappoint …
A recent survey of 18 executives from Apple’s supply chain found poor demand, suggesting that Apple sold millions fewer iPhones during the quarter than market expectations.
OTR Global, a media research firm, today issued a new investor note in which it predicts that Apple shipped between 37 million and 42 million iPhones during the second fiscal quarter of 2019. Wall Street analysts were expecting shipments between 40 million and 45 million. The note was first reported by Street Insider.
OTR says it surveyed 18 Asian supply chain executives about iPhone orders and demand during the quarter, concluding that Apple will likely miss expectations. The firm attributes the miss to “poor demand for the new XR and XS models.”
Reuters today reports on TSMC profits.
TSMC, a proxy for technology demand as its clients include iPhone maker Apple, Qualcomm and Huawei Technologies, posted a 32 percent drop in its net profit to T$61.4 billion ($2 billion) for January-March.
That marked the steepest fall since the third quarter of 2011 and also lagged the T$64.3 billion average of 21 analyst estimates compiled by Refinitiv.
The company first warned this was likely back in January, citing ‘a sudden drop in sales of high-end smartphones.’ The chipmaker also warns that revenue is likely to fall this quarter too, though less dramatically.
TSMC forecast second-quarter revenue of $7.55 billion to $7.65 billion. That would be 2.5-3.8 percent lower than the year ago, but better than a steep 16 percent drop in the first quarter.
TSMC is, however, optimistic about the longer-term future now that the Apple/Qualcomm battle has ended.
Taiwan’s TSMC struck an upbeat note about the outlook for the depressed global chip market, betting that a rollout of faster 5G mobile network would buoy demand […]
The world’s biggest contract chipmaker said a recent settlement between its top clients Apple and Qualcomm to end their two-year legal dispute over smartphone chips will help the Taiwanese firm.
We’re expecting to see a new 7nm ‘N7 Pro’ process for the A13 chip in this year’s iPhone, with TSMC ready to produce 5nm chips for next year’s iPhones.
Apple no longer reports iPhone unit sales, so we’ll only have the revenue to go on. Apple’s guidance calls for a wide range of $55-59B, and it seems likely it will at least hit the bottom-end of this thanks to a cautious approach after its earlier guidance fail.