Ofilm Confirms the Terminated Business Relationship with Apple

Major Chinese touch panel supplier Ofilm announced at the Shenzhen Stock Exchange to have received a notification from a specific client from overseas (hereinafter referred to as the specific client) who plans to terminate the procurement relationship with the supplier and its subsidiaries, and will no longer obtain orders of existing businesses from the specific client subsequently. The market believes that this specific client is Apple, which confirms the rumor of Ofilm being kicked out of the supply chain of Apple.

The statement of Ofilm lists that the audited revenue from relevant businesses with the specific client was at RMB 11.698 billion in 2019, which accounted for 22.51% of the total audited operating revenue for 2019. In accordance with the aforementioned emergency, the supplier will contact the auditing and evaluation agencies as soon as possible to implement an impairment test on assets including the relevant equipment, with test results and accrual yet to be confirmed. The plan pertaining to the sales of all or partial assets of the subsidiaries that are related to the businesses of the specific client is still in progress.

Although Ofilm did not disclose the identity of the specific client in the public announcement, the coverage of Reuters indicates that the specific client is Apple as mentioned by a person of interest. In fact, Ofilm has been rumored to be kicked out of the supply chain of Apple since last year. The supplier was identified by the US Department of Commerce to be participating in the persecution of human rights for the Uyghurs alongside 11 other Chinese businesses, and was sanctioned by the US. A rumor surfaced in September regarding how Apple plans to remove Ofilm from its supply chain, and the orders of touch panels for iPad were fully shifted to GiS and TPK, whereas another rumor regarding how Apple restricted Ofilm’s supply of camera modules for the older iPhone models had emerged in December, though the latter denied the speculation then.

Now, Ofilm has announced the part ways with the specific client, who should be Apple according to the ratio of revenue. Ofilm pointed out that the two parties are still evaluating the impact and the relatively large uncertainties derived from the termination of orders, and the supplier is also evaluating the impact of the particular incident on operation and performance.  

 (Cover photo source: Ofilm)

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