Published in Mobiles

Metal chassis makers giving up

by on11 January 2016


Cutting production

Makers of metal cases for smartphones are giving up and are halting their expansion plans.

According to Digitimes the metal makers are waiting for demand to recover.

For a while, metal demand looked like it was not going to suffer from the same problems as plastic cases. Plastic chassis demand was crippled with an oversupply, but metal chassis continued to see strong demand during the past few years.

The makers of metal were about to expand their capacities and improve technologies to beat the competition. Now it looks like demand is weakening and makers will decelerate their capacity expansions to prevent oversupply.

Foxconn has reduced $115.69 million investment in metal cases because Apple has been gradually shifting its chassis orders to other partners. Foxconn has reported seeing orders for cooling modules and games console assembly dropping.

Catcher and Foxconn are the kings of metal. Between them they have more than 20,000 CNC machines.

Casetek has also been expanding its capacity in the past couple of years and was planning to expand its number of CNC machines to 10,000.

Digitimes said that metal chassis makers have stopped purchasing new equipment. But most of them are still constructing new facilities for Apple's new iPhone products for the second half of 2016.

These could be a huge white elephant if the iPhone 7 does as well as the iPhone 6s. However companies made the investment decision 18 months ago when everyone, other than us, was claiming that Apple was going to be untouched by the downturn in tablets and smartphones.

Last modified on 11 January 2016
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