The shares of several major Apple suppliers fell on Friday, following reports that China had widened curbs on use of iPhones by state employees, fanning fears about sales prospects in one of the US company’s biggest markets. Staff in at least three Chinese ministries and government bodies were told not to use iPhones at work, sources familiar with the matter told Reuters.
The move is seen as a response to the US sanctions on Chinese tech firms, especially Huawei, which has been barred from accessing American technology and components. China has also accused the US of spying on its citizens through Apple devices, citing the revelations by former NSA contractor Edward Snowden.
Apple has not commented on the reports, but its chief executive Tim Cook has stressed the company’s long ties with China during a visit to Beijing in March. He also said that Apple would continue to invest in the country and support its developers.
Huawei launches new smartphone with advanced chip
The shares of Apple suppliers were also weighed down by fears that Chinese mobile phone maker Huawei could return as an Apple rival after it launched presales for a new version of its Mate 60 smartphone that uses an advanced chip. The chip, called Kirin 9000, is based on a 5-nanometer process and boasts superior performance and power efficiency than its competitors.
Huawei has been struggling to maintain its global market share after the US sanctions cut off its access to key suppliers such as TSMC, Qualcomm and Google. The company has been stockpiling chips and components to keep its production going, but analysts say it will run out of supplies soon.
The Mate 60 series is likely to be Huawei’s last flagship smartphone that uses its own chips, as the company has no alternative source of advanced semiconductors. The phone is expected to sell well in China, where Huawei still enjoys strong brand loyalty and patriotic support.
Apple suppliers’ shares drop across Asia
The news of China’s iPhone ban and Huawei’s new launch hit the shares of several major Apple suppliers across Asia. Taiwan’s TSMC, the world’s largest contract chipmaker and a major Apple supplier, dropped about 0.7%, outpacing a fall of about 0.3% in the benchmark index. Shares of ASE Technology Holding Co Ltd, one of the world’s largest semiconductor testing and packaging firms, fell more than 2%, while camera lens-maker Largan Precision Co Ltd dropped more than 3%.
In China, Luxshare Precision Industry, maker of connector cables for the iPhone and MacBook as well as AirPods, which also owns factories capable of making iPhones, fell 1.5%. Its shares were also hit last week by the Huawei launch. Japanese chip equipment maker Tokyo Electron dropped 4% on Friday.
Nearly a fifth of Apple’s revenue is generated in China, where thousands of workers are employed by the company and its suppliers. The company is set to launch its new iPhone 15 on Tuesday, hoping to attract customers with its improved design and features.