Apple supplier GoerTek anticipates revenue to drop 50%-60% from last year

Apple Airpods supplier GoerTek expects net profit in 2022 to be between 1.710 billion yuan and 2.137 billion yuan, a year-on-year decrease of 50%-60%.

“Affected by the suspension of a product for a key overseas customer,” the company announced on Friday, “the loss is about 2 billion to 2.4 billion yuan, which will have a significant impact on its operating performance in 2022.”

In early November, GoerTek warned that it had received a notice from a “major overseas customer” asking it to suspend production of certain products. The suspension will affect revenue of up to 3.3 billion yuan ($455 million), equivalent to about 4.2% of the company’s total revenue in 2021, the company said.

According to Jefferies analyst Ming-Chi Kuo, a renowned Apple analyst at research firm TF Securities, the product is the AirPods Pro 2, a wireless earphone set.

Kuo said that based on his checks, GoerTek’s suspension of production is more likely due to production issues rather than demand issues.

Another Apple supplier, Dongguan-based Luxshare, was reportedly able to quickly resolve the issue and resume production, but GoerTek was still working with an Apple engineering team on-site to overcome the challenge.

GoerTek also counts Meta, Samsung and Microsoft as its customers.