iPhone XS Weakening Demand To Lower TSMC Revenue In Early 2019

If a new report is to be believed, Apple’s iPhone XS-led trio of 2018 smartphones is suffering such a sad fate that the Cupertino giant has already cut back in its chip orders for the handsets.

Digitimes reported Monday citing Taiwan’s Central News Agency and Chinese-language newspaper Commercial Times that Taiwan Semiconductor Manufacturing Company (TSMC) is very likely to post a 14-16 percent revenue drop in the first three-month period of 2019.

Sources claim that the sequential decline in TSMC’s consolidated revenues would be due to inventory correction at its graphics chip clients as well as the weakening demand for Apple’s new smartphones, namely: the iPhone XS, iPhone XS Max, and iPhone XR.

While the slowdown in demand for iPhones and other smartphones would be evident starting early next year, TSMC is expected to post a 10-11 percent sequential increase in the final quarter of 2018. Institutional investors even say that TSMC would post revenues amounting to between $9.35 million and $9.45 billion.

The news does not come as a surprise considering that Apple’s latest iPhone offerings appear to be not performing so well. The Cupertino giant no longer reports unit sales, but Forbes says there are indicators from Apple’s supply chain sources that show the downward trend on iPhone sales.

In addition to the alleged falling numbers of the new iPhones, there’s also a report claiming that Apple has decided to lower prices of the iPhone XR in Japan because it is being overshadowed by the iPhone 8 and iPhone 8 Plus in the country. The price drop is expected to take effect next week.

The Wall Street Journal added that Apple has also decided to restart production of last year’s iPhone X due to certain stipulations in the tech giant’s contract with Samsung Display. Apparently, Apple has to meet minimum order requirements of OLED display panels as per their contract.

Bringing back the iPhone X would be beneficial to Apple considering that the iPhone XS and iPhone XS Max are experiencing sluggish sales. The company would be able to use its excess OLED screen supply on a product that has already been proven to be very popular among consumers. However, it’s still not clear if Apple would resume the sale of the iPhone X worldwide, or if it’s going to bring back the handset in select markets only.