Apple is down over 1% to below $91 per share on Thursday after a Nikkei report revealed that Taiwan Semiconductor Manufacturing Company, Apple’s main processor chip supplier, is looking at a terrible second half of 2016.
One source tells Nikkei that its peak season shipments will “not be able to compare to the past few years.”
From the report:
Another source said that for Taiwan Semiconductor Manufacturing Company, the sole supplier for the latest A10 chips used in iPhone 7, its iPhone 6s and iPhone 7 chip shipments for the June to December period will likely shrink to 70%–80% of the level reached in the second half of 2015.
If chips are cut for the second half of the year, that indicates that Apple could be cutting orders for the upcoming iPhone 7. It’s also possible but unlikely that Apple could have found a second chip supplier to produce its A10 processor.
Other Apple suppliers are seeing share prices fall as well.
In April, Apple announced very disappointing earnings, which included short-term sales guidance that was significantly lower than Wall Street expectations.
Some investors hoped, however, that the iPhone 7, expected to come out this fall, would boost Apple revenues and profit. However, if Apple is cutting orders for its main chip, as Nikkei implies, that would mean the iPhone 7 could be another sales disappointment.
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