Apple Strengthens Supply Chain in China While Growing Presence in Southeast Asia and India
Portfolio Pulse from Anusuya Lahiri
Apple Inc (AAPL) is expanding its supplier network in China while also growing its presence in Southeast Asia and India, despite geopolitical tensions and a tech conflict between the U.S. and China. The company has increased its China-based suppliers, reducing reliance on other countries, and has seen a surge in suppliers in Vietnam and Thailand. Despite diversification efforts, China remains a significant part of Apple's supply chain. Apple's global shipments dropped nearly 10%, with softening demand in China, where it offered iPhone 15 series discounts. Morgan Stanley anticipates a slight revenue increase for the March quarter but expects a significant downward revision for June quarter guidance. Apple stock has gained 4% in the last 12 months, and exposure to AAPL can be gained through ETFs like VGT and XLK.
April 26, 2024 | 1:26 pm
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Nvidia Corp is affected by the U.S. semiconductor technology embargo on China, which impacts the import of sophisticated AI chips.
The U.S. embargo on semiconductor technology to China, including sophisticated AI chips from Nvidia, could negatively impact Nvidia's business operations in China, potentially leading to a short-term negative impact on NVDA's stock price as the company navigates these regulatory challenges.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 70
NEUTRAL IMPACT
Apple is expanding its supply chain in China and Southeast Asia, despite global shipment drops and softening demand in China. Morgan Stanley predicts a slight revenue increase for the March quarter but a significant downward revision for June.
Apple's expansion in China and Southeast Asia indicates a strategic move to diversify its supply chain and mitigate geopolitical risks. However, the global shipment drop and soft demand in China could impact short-term revenue projections, making the stock's short-term impact neutral as investors weigh these factors.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
Vanguard Information Tech ETF, which includes AAPL as part of its holdings, could see an impact based on Apple's performance and strategic moves in its supply chain and market presence.
Given that AAPL is a significant holding within the Vanguard Information Tech ETF (VGT), any major news or performance shifts in Apple, such as its supply chain expansion or market demand changes, could indirectly impact VGT's performance in the short term.
CONFIDENCE 75
IMPORTANCE 65
RELEVANCE 60
NEUTRAL IMPACT
SPDR Select Sector Fund - Technology, which includes AAPL, might be influenced by Apple's recent strategic decisions and market performance.
As AAPL is a key component of the SPDR Select Sector Fund - Technology (XLK), any significant developments in Apple's business strategy, supply chain adjustments, or market performance can have a short-term influence on XLK's performance, reflecting Apple's weight in the ETF.
CONFIDENCE 75
IMPORTANCE 65
RELEVANCE 60