Amidst growing concerns of a potential iPhone embargo in China, Apple's key suppliers faced a significant drop in their stock prices last Friday. Reports hinted at China's increased restrictions on iPhones within its government offices, raising worries about Apple's sales prospects in this critical market.
Sources revealed that employees in several Chinese government ministries received directives to avoid using iPhones during office hours. These reports came to light through Reuters.
Taiwan's leading contract chip manufacturer, TSMC, which is a major Apple supplier, saw its stock decline by approximately 0.7%. This drop exceeded the minor 0.3% dip observed in the TWII index.
Meanwhile, shares of ASE Technology Holding Co Ltd, a global leader in semiconductor testing and packaging, fell by over 2%. Similarly, Largan Precision Co Ltd, known for its camera lenses, experienced a more substantial drop of more than 3%.
Allen Huang, Executive Director of Mega International Investment Services Corp in Taipei, speculated on the possibility of China expanding its bans on officials' iPhone usage, citing the influence of Chinese nationalism on recent policy decisions.
Adding to Apple's challenges, Huawei Technologies, a prominent Chinese smartphone manufacturer, is expected to intensify competition with the upcoming iPhone 15, according to Huang.
In China, Luxshare Precision Industry, a manufacturer of connector cables for Apple products, including iPhones, MacBooks, and AirPods, witnessed a 1.5% decline. The company had previously faced challenges due to the launch of Huawei's products.
Japanese chip manufacturing equipment company Tokyo Electron recorded a significant 4% decrease in its stock value on Friday.
China represents a substantial revenue source for Apple, contributing nearly a fifth of its total income. The company and its network of suppliers employ thousands of individuals in China. During a visit to Beijing in March, Chief Executive Tim Cook reaffirmed Apple's enduring ties with the nation.
China's iPhone restrictions send shockwaves through Apple's supplier stocks
China represents a substantial revenue source for Apple, contributing nearly a fifth of its total income
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