[ad_1]
Apple’s suppliers and partners are getting hit hard following the iPhone maker’s revenue warning due to the coronavirus epidemic in China, underscoring fears about the financial fallout of the outbreak.
Qorvo, a radio frequency chip supplier for Apple, fell nearly 2.5% on Tuesday morning. Credit Suisse estimates 30% of Qorvo’s revenues come from Apple. Chip company Skyworks Solutions, with about half of its sales from Apple, fell 2.4% and Lam Research skidded nearly 4%.
Other chip suppliers like Broadcom, Micron and Intel, fell 1.2%, 1.8% and 1%, respectively. About 20% of Broadcom’s revenues come from Apple and about 5% of Micron and Intel’s come from the iPhone maker. Semiconductor companies Nvidia and Xilinx dropped 1.5% and 2.3%.
Apple said Monday it does not expect to make its quarterly revenue forecast due to lower iPhone supply globally and lower Chinese demand as a result of the coronavirus. Apple previously forecast revenue of $63 billion to $67 billion in its fiscal second quarter but did not give new guidance. Manufacturing facilities in China that produce Apple’s iPhone have reopened but are ramping up more slowly than expected, Apple said.
Apple suppliers and partners are in the eye of the COVID-19 storm, said Bank of America.
“This will have a ripple effect of increased uncertainty and guide-downs across the semiconductor supply chain since Apple’s warning suggests a weak demand environment in China which impacts other smartphone vendors and their respective supply chains also,” analyst Vivek Arya said in a note to clients Tuesday. “So the impact is greater than just Apple itself.”
Apple’s warning knocked major U.S. equity averages off their recent record highs. The Dow Jones Industrial Average was down more than 100 points at the open. Shares of Apple sank 2.3% in morning trading on Tuesday.
The spreading deadly coronavirus has dominated the news cycle for most of this year, exacerbating fears of the outbreak’s impact on global economic growth. As of Tuesday, more than 73,400 cases of the coronavirus have been confirmed, including at least 1,874 deaths, mostly in China.
Credit Suisse said Monday the coronavirus “impact is more likely demand disruption/dislocation than outright destruction.” The firm estimates any weakness will be recovered by the second half of 2020.
—With reporting by Michael Bloom.
[ad_2]
Source link
Leave a Reply