Apple slides amid reports of China tax probe into iPhone assembler Foxconn

Published 3:12 am Monday, October 23, 2023

Apple  (AAPL) – Get Free Report shares moved lower in pre-market trading Monday following reports that its key supply-chain partner, Taiwan-based Foxconn, is facing what could be a politically motivated probe into its tax affairs by officials in China. 

China-based subsidiaries of Foxconn, the world’s biggest assembler of Apple iPhones, is now the subject of tax audits from local authorities in Henan, Hubei, Guangdong and Jiangsu provinces, the state-controlled Global Times reported Sunday, while adding its land use is also being probed by China department of natural resources.

The moves follow a series of trade and export restrictions on high-tech semiconductors and AI-related technologies put in place by President Joe Biden over the past year and could draw Apple, the world’s biggest tech company, into the ever-growing dispute between Washington and Beijing. 

Earlier this fall, China reportedly banned the use of iPhones by government employees and state-backed enterprises, which came just days after the launch of China-based tech group Huawei’s new handset, the Mate 60, which could pressure Apple’s sales in one of its most important markets.

Apple said in early August iPhone revenues fell 2.5% from last year to $39.67 billion over the three months ending in June,  while China sales rose 1.1% from last year’s Covid-hit period in the world’s second largest economy to $15.76 billion.

Apple shares were marked 1.43% lower in pre-market trading to indicate an opening bell price of $170.41 each, a move that would trim the stock’s six-month gain to just 4.6%.  

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