Apple’s About-Face on iPhone 14 Production Leaves Suppliers On the Hook

tech.hindustantimes.com:

Apple Inc. is pulling back from plans to increase production of iPhone 14 series this year. Instead, it will produce about as many as the prior year, in line with its original forecast. Fair enough — a looming global recession and strong dollar probably mean consumers outside the US will feel the pinch if and when they set out to buy a new phone.

Apple had raised its sales projections in the weeks leading up to the iPhone 14's release, before reverting to its earlier forecast. So in theory, the retreat didn't massively move the needle for its own products. But the trickle-down effect is harder to manage. What happens to the supply chain and the hundreds of manufacturers depending on Apple for guidance? The latest news hit them hard, sending the shares of chipmakers and phone assemblers tumbling.

Demand for memory chips, a key component in smartphones and other electronics, was already showing signs of weakening months ago — receding from the pandemic boom when everyone was sitting at home glued to their devices. In December last year, analysts at Jefferies Financial Group Inc. noted that the second-half outlook was “less certain” than the first due to weak demand for phones, TVs and consumer PCs.

Yet suppliers can still be caught off-guard when big customers alter their guidance, especially at short notice. It was only recently that some of Apple's suppliers had started making preparations for an expected 7% boost in orders.

Further down the chain, makers of the semiconductor production equipment used to make the chips — themselves victims of a bottleneck that squeezed output over the past two years — had been anticipating a pickup. Manufacturers in this $60 billion-plus industry were, as recently as July, expecting