Shares of Apple suppliers fell in Asia on Wednesday after Barclays downgraded the iPhone maker on concerns that demand for its products would remain weak in 2024.
In Wednesday morning trading, shares of Taiwan Semiconductor Manufacturing Company (TSMC) dropped more than 2%. TSMC is a prominent producer of cutting-edge processors for major companies such as Apple and Nvidia. Another key Apple supplier, Hon Hai Technology Group, commonly known as Foxconn, also experienced a 1.33% decline. Foxconn, based in Taiwan, holds the title of the world’s largest contract electronics manufacturer and is responsible for assembling Apple’s iPhones.
The technology and chip sectors witnessed a broader decline, with Samsung Electronics and SK Hynix, among others, experiencing more than a 2% drop. LG Electronics fell 1.78%, contributing to a 1.85% dip in South Korea’s Kospi index. Shares of Apple suppliers
Ray Wang from Constellation Research in Silicon Valley noted, “We’re seeing that suppliers are still seeing robust growth on the iPhone 15. We’re in the middle of a supercycle.” He mentioned that there are still significant numbers of iPhones, around 200 to 300 million, expected to transition to 5G in the next 24 months. However, Wang acknowledged that concerns might be more related to valuation than growth.
The previous day, Barclays downgraded Apple’s stock to underweight and adjusted its price target to $160 from $161, citing weaknesses in iPhone 15 sales, which could indicate lower demand for the upcoming iPhone 16 and other Apple products. Apple shares closed 3.58% lower on Tuesday. Analyst Tim Long expressed concerns about iPhone volumes and mix, along with a lack of rebound in Macs, iPads, and wearables.