Apple suppliers, Taiwan stocks boosted on iPhone 7 reports

TAIPEI, Taiwan – Taipei-listed Apple suppliers got a boost Monday, May 23, after a report the smartphone maker has placed a bullish order for its iPhone 7 series, telling suppliers to kickstart production.

The unveiling of the next-generation iPhone, expected in September, will be a key moment for the Silicon Valley giant as questions swirl over whether it can keep up in the face of fierce competition from the likes of Google.

Apple’s revenue was down during the first 3 months of this year after the first drop in iPhone sales since the release of the world-changing handsets in 2007.

But according to a report in Taiwan’s Economic Daily News, the company is ordering at least 72 million units of the iPhone 7 series, a significantly higher figure than the 65 million-level previously predicted by some analysts.

That report sent Apple suppliers rocketing, helping to drag up Taiwan’s weighted index 2.6%.

“The report on the Economic Daily News did help lift the market after the buying of iPhone supplier shares, which had plunged on Apple’s uncertain outlook,” Jeff Pu of Yuanta Securities Investment Consulting told AFP.

iPhone assembler Pegatron surged 9.9% while Catcher Technology – which provides metal casing for Apple handsets – jumped 9.7%.

Top chipmaker Taiwan Semiconductor Manufacturing (TSMC) and components manufacturer Hon Hai Precision Industry, known as Foxconn, also rose 3.7% and 4.6% respectively.

TSMC is expected to produce the A10 chip for the iPhone 7, while nearly half of Hon Hai’s revenue is generated by orders from Apple.

Pu said the overall advance in Taipei could also be attributed to last week’s swearing in of Taiwan’s new president Tsai Ing-wen, from the China-skeptic Democratic Progressive Party (DPP).

He said the strong buying was partly prompted by Tsai’s speech, during which she struck a conciliatory note calling for a “positive dialogue” with China on fraught cross-strait ties.

“Buying had shrunk before her inauguration, but now as the mainland’s reaction was less strong than expected, the worries have eased a bit,” he said. – Rappler.com