The recent decline in iPhone sales is making its impact known on the fortunes of companies in Apple’s supply chain. Main iPhone assembly partner Foxconn announced a 31% drop in its Second quarter net profit, which was attributed to slow phone sales. The company’s profits came in below analyst expectations, with net profits of NT$17.7B ($566) against analyst expectations of NT$23.9B. (Via the Wall Street Journal)
The impact on suppliers of reduced iPhone demand was first seen back in May, when it was reported that Foxconn, Pegatron, Sharp, Japan Display and Sony had all seen their fortunes falling. The impact on one supplier in particular has worsened dramatically …
Japan Display, which gets over half its revenue from Apple, is reported to be seeking financial support from a Japanese government-backed fund. The company said it had had “encountered a temporary funding shortage” after reporting a quarterly net loss of ¥11.8bn ($115m).
While CEO Mitsuru Homma said the funding shortage has been resolved, analysts are reportedly skeptical that the funding issues have been resolved, as the company will require a capital infusion to continue to be attractive to Apple as a supplier. Japan Display had hoped to merge with Sharp, but those hopes were dashed with the Foxconn acquisition of Sharp.