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Business

Weak Apple earnings hit suppliers' shares

The iPhone 6s has not flown off the shelves as previous models have.

TAIPEI -- Shares in key Apple suppliers slid Wednesday after the U.S. tech giant announced its first quarterly revenue decline in 13 years.

     Shares in key iPhone assembler Hon Hai Precision Industry closed 0.87% lower at 79.5 New Taiwan dollars ($2.45).

     Taiwan Semiconductor Manufacturing Co., key supplier for Apple's core processor chips, declined 0.95% to NT$156.5, and Advanced Semiconductor Engineering, a major chip assembler and tester, closed 1.65% lower at NT$32.75.

     Shares in Catcher Technology, a metal casing supplier for iPhones, slipped 1.27% to NT$233.5, and major camera lens module maker Largan Precision fell 0.44% to NT$2,240.

     Meanwhile, major South Korean panel maker LG Display, which supplies panels for the latest iPhones, said Wednesday its net profit tumbled 50% on the year to 1 billion won ($870,000) in the January-March period. The slump came amid weakening demand for premium smartphones and large TVs. News of the underwhelming earnings pushed down LG Display shares by 3.86% to 24,900 won at the end of trade Wednesday.

     Apple's recent lackluster sales have contributed to the company's roughly 20% share price decline over the past 12 months.

     Analysts in Taipei are warning that Apple's eroding performance will take a toll on its suppliers.

     "Apple's share price weakness will certainly drag on the performance of Apple supply chain stocks in the near term," said Jeff Pu, an analyst at Yuanta Investment Consulting.

     "If we assume an iPhone 7 build forecast of only 75 million units, which is well below the 90 million units used for the iPhone 6/6S, this would have a significant impact on Apple and its Asia-based supply chain's sales, gross profit and operating profit," said Arthur Liao, an analyst at Fubon Securities.

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