Whether it is the Chinese subcontractor Foxconn or semiconductor manufacturers Intel, Broadcom or Qualcomm, all have suffered in recent months from the strategic changes of the iPhone maker.
Indeed, Bloomberg revealed on Monday that Apple wants to replace Broadcom's chips with an internal design by 2025. This is a tough pill to swallow for the San Jose-based group, whose 20% of revenues depend on the Cupertino firm, its biggest customer. The same goes for Qualcomm: Apple would like to replace its cellular chips with its own production by the end of 2024. As for Intel's chips, it's already partly done. Tim Cook's group has adopted its own range of semiconductors for its Mac computers. The idea behind this is to create more and more "home-made" electronic gadgets and to increase (even more) its already record margins (the operating margin is 30.3% in 2022).
The tech giant's choices have major consequences on its suppliers. Last autumn, the Taiwanese behemoth Foxconn took the full brunt of Apple's decision to entrust part of the Chinese production to Luxshare Precision. A kind of punishment after the protests that agitated the Foxconn factory during this period. In this little game, the big winner is obviously Apple, since putting subcontractors in competition allows it to lower prices.



Drawing by Amandine Victor, for MarketScreener