Apple Suppliers Forecast Grim Year on Weak iPhone 7 Demand: Report

Apple’s sole A10 chip supplier for the forthcoming iPhone 7, Taiwan Semiconductor Manufacturing Company (TSMC), will likely see a shrink in chip shipments in the second half of this year, as the demand for the device will be weak, a source from the company has told Japanese news outlet, Nikkei.

Iphone 6 camera

TSMC will likely see shipments shrink to 70% to 80% of the level reached in the second half of 2015, the source said. That’s rather interesting, as the A9 chips powering the iPhone 6s and 6s Plus are supplied by both TSMC and its rival, Samsung.

The Nikkei report also cites Jason Cheng, CEO of key iPhone assembly partner Pegatron, who said that the second half of this year looks better than the first half, but they are “still cautious due to some unfavorable uncertainties.”

The main reasons cited for the grim outlook for Apple’s supplier are a lack of groundbreaking features and low demand for the iPhone 7, which will likely be launched this fall. Nikkei cites a person at a major Taiwanese Apple supplier as saying that the “iPhone 7’s lack of innovation is to be blamed for the weak demand,” which is rather interesting, since the device hasn’t even been launched yet.

The report of weak demand adds to negative reports about iPhone demand vanishing, as Apple posted its first decline in smartphone shipments and profits. Nikkei’s survey of brokerages found that Apple will likely ship slightly more than 200 million iPhones this year, down from 230 million sold in 2015.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • Jon

    Did anyone else have one of those teachers in high school that put together their curriculum, made the quizzes and tests, developed the assignments, and then just re-used them year, after year, after year with minor tweaks along the way? Sometimes I feel like the narrative for Apple analysts is the same… like clockwork quarter by quarter year after year.

    EDIT: Not to say there aren’t concerns with growth (I think there are) but it just seems like I’ve read this story a half dozen times already.

  • KS

    Halfway through your comment I thought you were talking about, how teachers reuse the same work year after year, Apple has decided to do the same 🙂

  • Flash

    What have the other phone companies been doing, year after year? Is Apple really doing anything differently? I believe. Take the flagship line of any company and they have had multiple declines in sales…Apple had 1 year, with huge profit still. Samsung has been seeing a decline in revenue since q3 of 2013 (a few up 1/4’s).