It had to happen. Nothing can continue to grow unabated forever. Not even Moore’s law and not iPhone sales
The Apple juggernaut is far from over simply because it reported its first down quarter in many years. But what Tim Cook called “a pause in growth” marks a new phase in which its financials are likely to be more lumpy, riding the ups and downs of product cycles.
Apple and the iPhone will no doubt have many good quarters to come, but they will not be as consistently rosy. Apple’s sneeze is the result of an industrial malaise, call it malnourished market drivers.
PCs are in an extended decline and smartphone growth is slowing down as sales plateau in major developed markets, and even some big developing ones. Apple, for instance, noted its China sales sagged after a big surge a year ago.
The implications of this new phase will ripple through the semiconductor industry.
Market watcher IC Insights noted that last year Apple represented more than all the growth at TSMC, the world’s largest independent chip foundry. TSMC’s foundry sales increased by $1.46 billion last year while its sales to Apple jumped by $1.99 billion. “Without Apple, TSMC’s foundry sales would have declined by 2% last year, eight points less than the 6% increase it logged when including Apple,” it said.
Apple impacts a broad array of chip makers, too.
“The entire semiconductor ecosystem inside an IPhone can spell life or death for who wins the honor and privilege of supplying each chip for each function,” said analyst Robert Maire in an email newsletter following the Apple results. “I could even be so bold as to suggest that Apple even impacts EUV progress as TSMC seems less willing to take a risk on EUV at 7nm lest it delay that technology node,” he added.
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