Apple suppliers suffer financial losses due to iPhone ban in China

Amid rising tensions in Sino-US relations and Huawei’s new competitive strength, Apple’s suppliers in China are in a shaky position.

Amid rising tensions in Sino-US relations and Huawei’s new competitive strength, Apple’s suppliers in China are in a shaky position. The fallout began when Beijing issued a directive instructing central government employees to stop using iPhones at work, a move that set off a chain reaction in the tech industry.

Apple saw its stock price drop 6.4% in just two days, causing a market capitalization loss of $190 billion. Reporting from Gizmochina (10/9), this drastic decline is a direct result of China’s tough stance on the use of iPhones in government environments, triggering concerns about the future prospects of Apple and its supplier companies.

The greater impact of this situation is being felt in the broader Chinese stock market. The CSI 300 Index, which includes China’s top companies, fell 0.5%, ending a week marked by a 1.4% decline. The Shanghai Composite Index fell 0.2%, while the Shenzhen Composite Index fell 0.4%.

The situation escalated to the point that Hong Kong canceled trading in shares and derivatives after a black thunderstorm warning was issued by the Observatory. This marked the second incident in the same month where adverse weather conditions disrupted the city’s financial markets.

Affected in this chaos are Apple’s leading suppliers. Foxconn Industrial Internet shares fell 0.6% and closed at 19.08 yuan. Luxshare Precision Industry fell 2%, ending at 29.35 yuan. This decline was caused by the Chinese government’s ban on iPhones for employees focused on investment, trade and international relations.

Other suppliers included battery maker Contemporary Amperex Technology (down 1.6% to 222.94 yuan), electric vehicle maker BYD (down 1.8% to 244.05 yuan), and AI server maker Inspur Electronic (down 3.3 % to 35.17 yuan), also bore the brunt of the impact. Even liquor distiller Kweichow Moutai fell 1.1%, closing at 1,818.50 yuan, while its peer Wuliangye lost 1.3%, ending at 160.96 yuan.

Adding pressure to Apple’s struggles in one of its biggest markets, Huawei launched two new phones: the foldable Mate X5 and the Mate 60 Pro+. This demonstrated resilience to US sanctions and attracted significant global attention.

In Taiwan, Apple’s main supplier Largan Precision, known as a maker of camera lenses, plunged more than 4%, while contract chipmaker TSMC fell 0.6% on Friday.

Luxshare Precision Industry, a maker of connector cables for Apple devices, including iPhones and MacBooks, as well as AirPods, also saw its shares fall 2%, partly due to recent Huawei product launches.

Analysts speculate that Huawei’s rise could be the first step in its efforts to challenge Apple’s dominance. As the tech battle between the giants intensifies, the future of Apple and its suppliers remains uncertain in the volatile Chinese market.


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