Sales at Apple’s largest Taiwanese suppliers fell again in May for the fourth straight month, as continued rising living costs are forcing consumers in many regions to cut non-essential spending, including savings on smartphones and computers. writes Bloomberg.
According to the source, the total revenue of equipment assembly companies like Hon Hai Precision Industry (Foxconn brand) and component makers like Taiwan Semiconductor Manufacturing Co. (TSMC) was NT$944.10 billion (US$30.5 billion) in May, 7.8 % less than last year and 2.1% less than in April.
Apple had a challenging first quarter as sales of its devices either declined or stalled through the first three months of 2023. The slight increase in iPhone sales was taken as a surprisingly positive signal by the market as analysts expected a sharper decline.
The Mac division was particularly hard-hit, driven by a sharp drop in demand for personal computers, which resulted in a 31% decline in revenue in the segment in the first quarter. Leading PC makers Lenovo Group and Asustek Computer recently announced that they do not expect demand to return to growth until next year.
Apple has a stronger presence in the smartphone market than its peers, many of which saw their shipments fall by double digits as they liquidated unsold inventory. This has impacted demand for Foxconn and TSMC services as they offer a wider range of consumer electronics.
This month, TSMC announced that it is entering a period of inventory clearing while noting the beginning of a recovery in some markets. The company also reiterated its guidance for a revenue decline of about 10% in dollar terms in the first half of 2023.