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Apple iPhone Parts Makers Warn of Weak Second Quarter

New iPhone 6s Models Go On Sale In U.S.New iPhone 6s Models Go On Sale In U.S.
Consumers wait to buy the new iPhone in September.Photograph by John Gress — Getty Images

Apple won’t reveal its revenue forecast for the second quarter for another two weeks, when it reports results for the first three months of the year, but warnings from some of the iPhone maker’s suppliers may spook some investors.

Thursday night, Taiwan Semiconductor Manufacturing (TSM) and Largan Precision, which both supply components to Apple (AAPL), warned that second-quarter revenue was coming in weaker than expected.

Analysts were expecting 11% sales growth at iPhone chip supplier TSM, for example, but the company said the increase will likely be only 6% to 7%. Largan, which doesn’t trade on U.S. exchanges and makes camera lenses for the iPhone, said sales in April and May would be unchanged from last year and added it could not forecast June sales yet.

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To be sure, sometimes Apple parts suppliers suffer when Apple switches to a competing firm or changes the design of a phone. In those cases, weak results at a supplier would not indicate any problems with overall iPhone sales.

Analysts are already expecting weak iPhone sales for most of 2016, at least until new models arrive in the fall. If Apple continues to follow its usual strategy, this year it will offer a major upgrade to the physical design of the iPhone. The every-other-year overhaul tends to spark greater sales than the off-year “S” models that tend to have mainly internal upgrades.

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Apple is scheduled to report first-quarter results, its fiscal second quarter, on April 25 after the market closes.

Shares of Apple were almost unchanged in premarket trading on Friday, down 0.2% to $112.10. The shares have gained almost 7% so far this year, outperforming the 2% gain in the Standard & Poor’s 500 Index.