Shares in Asian suppliers and assemblers for Apple Inc fell on Tuesday due to profit warnings that point to weakness in iPhone sales. Taiwan-based assembler Hon Hai Precision Industry Co Ltd (Foxconn) dropped more than 3 percent and rival Pegatron Corp fell more than 5 percent. Both companies count Apple as one of their major customers.
The Cupertino, California-based tech giant's shares fell to their lowest in more than three months on Monday after three suppliers cut their forecasts for iPhone sales in the coming holiday season. Lumentum Holdings Inc, the main supplier of the Face ID technology in the latest generation of iPhones, cut $70 million off its revenue forecasts. Screen maker Japan Display Inc cited lower smartphone demand in cutting its outlook, while British chipmaker IQE Plc said it expects a reduction in its performance this year.
Apple warned earlier this month that holiday sales would miss Wall Street expectations due to weakness in emerging markets including India and foreign-exchange costs. Apple began shipping the iPhone XR on Oct. 26 after two weeks of pre-orders. The company had released the more expensive iPhone XS and XS Max more than a month earlier.
Shares in other Taiwan-based Apple suppliers also fell sharply on Tuesday. The world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co, fell 2.6 percent and camera lens-maker Largan Precision Co Ltd slid 3.6 percent. The Taiwan Weighted Index was down around 1.6 percent. Among other Apple suppliers in the region, Hong Kong-based acoustic components maker AAC Technologies Holdings Inc fell more than 6 percent.
South Korean electronic parts suppliers Samsung Electro-Mechanics Co Ltd, Apple's supplier of multi-layer ceramic capacitors, dropped more than 5 percent, while LG Innotek Co Ltd plunged 9.5 percent. Japan's Nikkei daily reported earlier this month that Apple had told Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR, the cheapest of this year's new launches.