China’s Goertek company announced on November 8 that they received a notification from “a major overseas customer” about suspending production of one of its intelligent audio products.

However, Goertek did not disclose the name of the “big overseas customer” and the reason for stopping production in its announcement. As a result, the company expects revenue to fall yearly by $460 million (3.3 billion yuan). As soon as the announcement was made, Goertek shares, with a market value of more than $985 million (70 billion yuan), dropped continuously in the following days. As a result, its market value evaporated by at least $1.4 billion.

Goertek is the leading supplier of Apple AirPod components and complete products. Experts speculate that this major foreign customer is most likely the Apple company.

Ming-Chi Kuo, a well-known Apple analyst, speculates that Goertek is possibly suspending production of AirPods Pro2. However, he added that Goertek’s discontinuance is more likely due to production problems than a demand issue.

On November 7, a large number of Goertek employees left the factory. Some employees told the Red Star Capital Bureau that about 8,000 hourly workers were laid off.

Chinese media report that the staff interviewed said that the entire Goertek U01 project was cut and the project involved about 30,000 employees.

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