Many of Apple's subcontractors have their revenues indexed on the iPhone sales curve. Of course, the recent profit warning of the Cupertino group could only result in a cascade of bad news for its suppliers.
The latest, TSMC, is not the most exposed of them (although Apple is its first customer ahead of Huawei, the world's second largest smartphone market). But it has just announced that it will record a sharp decline in sales in the first quarter, at -14% year on year. Its biggest decline since 2009.
Beyond the difficulties of the iPhone, the contraction of the smartphone market as a whole weighs heavily on the activities of semiconductor manufacturers. In the last months of 2018, the company saw its revenue increase shyly by 2%, for a very slight increase in its net profit (+ 0.7%).
This year, TSMC has produced SoC chips [« system on a chip », qui regroupent plusieurs puces, dont le processeur, en un seul élément, NDLR] say "A12 Bionic" from Apple that equip the latest iPhone (XS, XS Max and XR) marketed in the fall of 2018.
Stocks weighing on TSMC's accounts
The American company turned to the Taiwanese foundry because it was the first to be able to massively produce chips of a size of 7 nanometers (nm); these have the advantage of being more efficient, take less space while being less energy hungry.
In the last quarter, this category accounted for 23% of TSMC's revenues. But the expected decline in sales of high-end smartphones, with the iPhone at the forefront, weighs heavily on the company's inventory.
Over a year, they increased by 40% in value, to 3.3 billion dollars. Finance Director Lora Ho warned that "A few quarters" TSMC to digest its excessive inventory.
A $ 25 billion investment in the 5 nm
At the end of the first half of 2018, TSMC was the world leader in the semiconductor foundry sector with a 56.1% market share, ahead of GlobalFoundries (9%), UMC (8.9%) and Samsung (7%). 4%), according to TrendForce data.
Last June, the Taiwanese group announced that it would invest $ 25 billion to start production in large series of chips engraved in 5 nm by the beginning of 2020. This engraving should include allowing 45% more compact chips and decrease power consumption by 20% at equal frequency. But the painful landing of the segment of high-end smartphones could make him reconsider his agenda.
Earlier this week, Dialog Semiconductor, another manufacturer of semi-conductors and subcontractor Apple (75% of its turnover is linked to the orders of the US group), said that its revenues (provisional) during in the final quarter of 2018 were at the lower end of the range of what it had anticipated, at $ 431 million.