Apple’s Stock Crashes After TSMC Q2 Guidance Indicates Slump in iPhone Sales

TSMC lobby

There have been multiple reports suggesting that iPhone X sales have not been below expectations. Some people dismissed these rumors due to the lack of any proof. As it turns out though, the decline in iPhone X sales after a strong start initially might be more than what was previously believed.

TSMC, which fabricates the A11 Bionic chip for Apple used inside the iPhone X, reported in its earnings guidance that it expects its Q2, 2018 revenue to be in the range of $7.8-$7.9 billion citing weak demands from its mobile sector — almost $1 billion below analysts expectations. The company also lowered its full-year revenue growth forecast to 10 percent from an initial expectation of 10-15 percent. TSMC mentioned in its earnings guidance call that it sees the “very high-end smartphone” market as a weak spot.

Apple is TSMC’s major customer so its comments are definitely pointing to the Cupertino company and the drop in demand for its phones here. However, Apple is not the only company due to which TSMC expects its revenue to grow at a slower pace this year. It also mentions that “uncertainty in cryptocurrency mining demand” is also one of the reasons behind it lowering its full-year forecast.

A decline in iPhone sales during Q2 of every year is the norm as many customers hold out on buying the handset as they wait for new iPhones which are unveiled in September. However, there was a huge hype surrounding the iPhone X before it launched but despite the handset being such a radical redesign, it has not lived up to analysts expectations.

The news has led to TSMC shares falling by almost 6 percent, while Apple shares have fallen to as low as $166.5 — down by over 3.5%.

[Via Real Money]