Demand for Smartphones is Slowing, Says Apple Supplier TSMC

[MacRumors]

Demand for consumer electronics like smartphones and PCs is slowing due to continued geopolitical uncertainties and new COVID-related lockdowns in China, according to TSMC Chairman Mark Liu.

TSMC, or Taiwan Semiconductor Manufacturing Company, is one of Apple's main suppliers, responsible for the A-series and M-series chips that go in Apple devices. Liu's comments were delivered at the Taiwan Semiconductor Industry Association and were shared by Nikkei.

Customer interest in smartphones is falling in China specifically, with Liu also warning about the rising cost of components and materials. Production costs are going up for chip companies, and Liu believes the "pressure could eventually be passed on to consumers," a scenario that could also see demand impacted by higher costs.

"Everyone in the industry is worried about rising costs across the overall supply chain... The semiconductor industry already and directly experienced that cost increase," Liu said, adding that the industry is also concerned about macroeconomic uncertainties this year.

Liu said that TSMC is not changing its growth targets and is still unable to meet customers' demand with its current capacity. TSMC plans to reorganize and prioritize orders for "areas that still see healthy demand."

Signs of a dip in customer demand surfaced this week amid rumors that Apple is planning to cut iPhone SE production. Just weeks after releasing the iPhone SE, Apple allegedly told suppliers that it wants to cut back on iPhone SE production by as much as two to three million units because of a "weaker-than-expected demand," though some suppliers have refuted this report.

Article Link: Demand for Smartphones is Slowing, Says Apple Supplier TSMC

 

[eric89074]

Modern smartphones are so fast most people are happy to keep them for 3-4 years.

 

[TracesOfArsenic]

I wonder why people don't want the "new" SE... ?

 

[alexe]

Good, maybe the rising prices will end this madness where everybody upgrades their phones every year for absolutely no reason.

We've really reached an absurd point in our society where people feel it's a special year if they opt NOT to upgrade to the latest new iPhone for once.

Of course every first world country citizen needs a new phone every year, because why not. What could possibly be wrong with this mentality.

 

[Small White Car]

I mean, I post here and used to be a yearly-upgrader and even I update every 3 years now.

 

[Mr. Dee]

Well it’s Apples own fault for making the phones last longer and keep receiving iOS updates. Shame on you Apple!

 

[DanteHicks79]

Only reason to upgrade these days is for camera improvements, and new batteries/less thermally damaged components.

 

[icanhazmac]

Could care less about camera upgrades, you will get my 8 only by prying it from my cold dead hand.

Unless I drop it.

 

[nylonsteel]

""pressure could eventually be passed on to consumers," a scenario that could also see demand impacted by higher costs." - inevitable

 

[StupidOpinion]

smartphones have reached the point of diminishing returns. there's not much more you can add to them without any drastic changes like putting macOS on it or something.

 

[kelemor88]

Only reason to upgrade these days is for camera improvements, and new batteries/less thermally damaged components.

Or so you can bring your parents to the future. I upgrade yearly because I hand them down to people that need them. My mom was on a 7 she got my 12 this year. My dad got my iPhone 11 from my wife and I’ll prolly upgrade this year and give my 13 pro max to my daughter. They would have never done it themselves

 

[Marshall73]

Smartphones have hit a performance plateau, that combined with rapid inflation and increased cost of living will hit smartphone sales, same with other luxury goods over the next couple of years. If you have a phone that’s 4 or 5 years old or less then there’s no real need to upgrade.

 

[now i see it]

Oh the poor smartphone industry. Down from 2.6B to 2.5B units. The sky is falling

 

[Scoob Redux]

MR has always fed this culture with "are the changes enough to justify the upgrade?" articles. Why in the world would someone "upgrade" just to get the latest model? A phone is a phone. You buy it and use it until you need a new one. Then you buy the latest, and you'll find out all the new features it has. Just like a car, a TV, or any other commodity.

 

[TheYayAreaLiving 🎗️]

I'm blaming the new iPhone SE. Jon himself made a very good point. Stretching the design to far out.

Watch the video from 0:32. Jon stated: Apple is using same old design from the iPhone 6 (September 2014) to sell them in 2022?

 

[munpip214]

Well maybe a dip in smartphones will allow us to get ahold of these M1Max/Ultra devices sooner

 

[lysingur]

The next cash cow is wearables (glasses, VR headsets, smart shoes). Then implants (vision augment, hearing "aids"). Don't worry about Apple. They'll be just fine.

 

[contacos]

It just makes no sense. You only go back using the exact same apps anyway.

 

[ouimetnick]

I wonder why people don't want the "new" SE... ?

I’m not sure the new SE was aimed at people that had the 2020 SE. Probably aimed at those with iPhone 7, 8, and god forbid those with a 6S.

 

[GMShadow]

I’m not sure the new SE was aimed at people that had the 2020 SE. Probably aimed at those with iPhone 7, 8, and god forbid those with a 6S.

Or a 6, or the 2016 SE. Price sensitive consumers who've decided it may be time for an upgrade.

That said, inflation is a real thing and I'm sure it's not helping in the markets where this phone would sell best.

 

[3304614]

Modern smartphones are so fast most people are happy to keep them for 3-4 years.

Indeed. I’m more than okay with my iPhone 12 Mini. And I would have continued to be okay with my iPhone 7 for a bit longer if the battery health wasn’t so terrible. I thought about replacing the battery, but decided to finally make the jump to 5G (last December). But now that I’m at 5G with the iPhone 12 Mini, I can’t imagine any compelling reason to buy a new iPhone anytime soon (not until something major like 6G).

 

[Marie.D]

Inflation doesn’t help either. With the cost of everything rising, people don’t have the extra money to upgrade.

 

[AvisDeene]

The last phone I purchased was the iPhone 6 plus. I got a free upgrade to the 6s Plus through my carriers insurance and I am still rocking it. It does everything I need it to do, albeit a little slower these days. I was waiting to see what they'd do with the SE and now that they've released it, I've decided to wait to see what the 14 will bring, only because I want a better screen and no longer need a larger phone.

 

[turbineseaplane]

I would have bought a new one years ago if they weren't all so large
Mini series isn't quite "mini" enough for me.

(SE1 user)

Everyone makes basically the same thing - same shape - same sizes -- not nearly enough interesting differentiation in this product category.

 

[frownface]

MR has always fed this culture with "are the changes enough to justify the upgrade?" articles. Why in the world would someone "upgrade" just to get the latest model? A phone is a phone. You buy it and use it until you need a new one. Then you buy the latest, and you'll find out all the new features it has. Just like a car, a TV, or any other commodity.

I'd argue that the changes had never been enough to justify the actual upgrade. At least not on a 12 month cycle.

Instead it was very much just about having the latest and greatest. It was fashion. A want rather than a need.

People used to say "Oh ****! is that the new iPhone? can I see it?", now people don't care, they don't fawn over it anymore. The days of lining up for new phone launches are gone.

Take away the "fashionable" needs for upgrading, and there's only practical reasons like a dying battery, a broken screen or updates no longer being supported.

People upgrade these days out of need rather than wants, and "need" has a much longer lifecycle. I'm on my 4th year of life on my XS and I see nothing alluring about upgrading.