With about four months left until Apple’s worldwide developers conference, chatter intensifies that Apple is re-aligning its suppliers. With both the iPhone 5S and iPhone 6 allegedly spotted in the wild and leaked parts cropping up on Chinese forums, new reports indicate that Apple has substantially cut iPhone 5 screen and chip orders.
And because Apple is the world’s top chip buyer second only to Samsung, any material change in its orders immediately reflects on the entire industry. Little wonder that researches are now calling for a slow down in semiconductor equipment manufacturer orders…
According to a report by Nikkei, Japan’s national media conglomerate, earnings of chip makers in 2013 could be stagnant as Apple has reportedly slashed iPhone 5 chip orders, causing shipments to slow among semiconductor equipment manufacturers.
Additionally, another story published by The Korea Economic Daily newspaper asserts that Apple is expected to largely reduce its first-quarter mobile screen orders, allegedly due to “high inventory levels”.
Specifically, DisplaySearch estimates suppliers delivered 153.44 million panels to Apple in the fourth quarter of 2012, up 67 percent sequentially and 93 percent annually.
Of these, Apple is said to have an estimated 62.2 percent of the 126.48 million iPhone panels and 4.1 million of the 26.96 million iPad panels left in the inventory.
Claimed iPhone 5S/6 speakers leaked in January.
The development follows a report that LG Display saw a 90 percent reduction in Apple panel shipments in January. Another Apple supplier, AU Optronics, reportedly also saw a sharp decline in shipments “by a considerable amount” in the first quarter of 2013.
Now, Tim Cook has taught us not to interpret supply chain news as a sign of weak demand, telling analyst on a conference call that “the supply chain is very complex” while suggesting market watchers not pay attention to a “single data point”:
We obviously have multiple sources for things. Yields might vary, supplier performance might vary.
As a rule of thumb, these tidbits are a good indication of upcoming products and manufacturing changes.
Jefferies analyst Peter Misek thinks the iPhone 5S is entering production in March, featuring a faster CPU/GPU combo and possibly an upgraded 13-megapixel camera. It should also come with a new display technology because the current in-cell display assembly process for the iPhone 5 screen has some difficulty detecting rapid swipes.
These two data points – a better processor and a new display technology – could easily explain why Apple’s supply chain is in turmoil ahead of the next iPhone.
Apple is also thought to have ordered Retina panels for the next iPad mini from both LG Display (which is the primary supplier of iPad mini panels) and Japan Display, a merger of the mobile display operations of Sony, Hitachi, Toshiba and the Innovation Network Corporation of Japan.
Image top of post via AnoStyle.