Beijing: Chinese maker of audio components Goertec, which makes AirPods for Apple, has slashed its annual revenue estimates by 60% after a "key overseas customer" asked it to halt production, analysts said. This dealt a blow to a supplier that is highly dependent on a single customer.

The company, which is based in Shandong province, told the Shenzhen exchange on Saturday in a filing that it had slashed its forecast for annual revenue to 1.7 billion yuan (US$244.4 million) from 4.7 billion yuan.

In response to the customer's request, Goertek said it did not expect to begin production of the Smart Acoustic product again this year.

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In early November, the business disclosed information for the first time, saying it would reduce revenue by 3.3 billion yuan in the fourth quarter, but added that "the impact on the company's business performance is still under review". Is."

The recently released AirPods Pro 2, whose assembly is "more likely due to production issues rather than demand issues," has been put on hold, according to multiple analysts including Kuo Ming-Chi of TF International Securities. The client was Apple.

Production of the AirPods Pro 2 was also affected, according to Jefferies analysts, who also said that there were no other order cuts or plans to remove Goertec from Apple's supply chain.

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In 2020, Goertek began producing Apple's iconic AirPods Pro series of wireless earbuds.

According to TF International's Kuo, Apple moved assembly to its main AirPods Pro supplier, Luxshare ICT, after Goertek asked it to halt production last month, to meet demand ahead of the holiday shopping season Could

Goertec's declining revenue serves as a warning to Chinese suppliers who are overly dependent on a small number of important customers.

Investor concerns over Goertec's diversification and profitability were fueled by financial reports that showed the company had highly concentrated customers. Goertec's top five customers account for approximately 90% of its total revenue, and its largest customer accounts for more than 40% of sales.

In a filing on Saturday, Goertek said its management team is actively negotiating with the client to find a solution.

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The Goertek assembly snag comes at the same time as other supply chain disruptions for Apple in China. The world's largest iPhone factory owned by Foxconn Technology Group in central China's Zhengzhou city experienced a labor exodus that was followed by a violent dispute between temporary workers and local police over wages and other matters.

Apple, which announced it will ship fewer iPhones in its Pro series, has stepped up plans to move production from other suppliers in China and move some production outside China, according to a report in The Wall Street Journal. Where is it?

Shares of Goertec rose 1.5% on Monday after falling earlier in the day.