Divergent results for Apple suppliers highlight memory price squeeze ahead of new iPhone

Foldable handsets will be a rare bright spot this year, fuelled by Apple’s highly anticipated entrance this autumn, says Counterpoint

Two major Chinese suppliers to Apple posted divergent first-half results, underscoring how soaring memory prices are squeezing profits even as component makers pin their hopes on upcoming iPhone releases for a second-half rebound.

Lens Technology, a Shenzhen- and Hong Kong-listed maker of smartphone glass screens, saw its net income nearly halve to 577 million yuan (US$85.8 million) in the six months through June, as revenue dropped 12.4 per cent to 28.9 billion yuan.

The company blamed the sales slump on soaring memory costs in the consumer electronics industry, which dampened market demand and forced the firm to scale back production in its Xiangtan factory. Exchange rate fluctuations also squeezed profits, the company said.

To reverse the downturn, Lens is banking on high-end components for an upcoming foldable device project with its key client, widely understood to be Apple. The supplier expected that deliveries of ultra-thin glass (UTG), colourless polyimide film and 3D glass covers would boost sales in the second half, according to a stock exchange filing on Tuesday.

“These products are complex in manufacturing and carry significantly increased values, positioning the company as the primary beneficiary of the upgrades from bar-type models to foldable handsets,” the firm said.

Industry insiders including TF International Securities analyst Kuo Ming-chi, known for his accurate assessment of Apple’s business, have identified Lens as a key supplier handling UTG for Apple’s flexible screens.