Shares in Asian suppliers and assemblers for Apple fell on Tuesday after several component makers warned of weaker than expected results, leading some market watchers to call the peak for iPhones in several key markets. Following a poor forecast earlier this month, analysts and investors voiced concern over the state of Apple’s business, contributing to growing worries that iPhone sales were stagnating and could hurt suppliers.
Fresh warnings on Monday from screen maker Japan Display, British chipmaker IQE and Lumentum Holdings, the main supplier of the Face ID technology in the latest generation of iPhones, hurt technology stocks in Asia on Tuesday.
Taiwan-based assembler Hon Hai Precision Industry (Foxconn) dropped more than 3 percent. Rival Pegatron fell more than 5 percent but later recouped losses. Both companies count Apple as a major customer.
The world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing, fell 2.6 percent, while Flexium Interconnect was down 1.5 percent. The Taiwan Weighted Index was down around 1.6 percent.
“Apple’s iPhone weakness has been a long-term issue for the Asia supply chain,” said Arthur Liao, an analyst at Fubon Research in Taipei.
“For Apple, iPhone shipment has reached its peak. For tech suppliers facing the future, they have no other big client like Apple.”
The company’s shares fell to their lowest level in more than three months on Monday.
Last week, a media report saying the iPhone maker had told its smartphone assemblers to halt plans for additional production lines dedicated to its new lower-priced iPhone XR had pressured supplier stocks.
Analysts said the lack of technological breakthroughs had put a cap on demand.
“With no new technology in sight next year for the supply chain, this is not ideal for the companies involved,” said Nicole Tu, a Taipei-based analyst at Yuanta Investment Consulting.
“Up through the first half of 2019, we likely won’t see any breakthrough.”
Lumentum on Monday slashed its profit and revenue forecast for the current quarter, while IQE warned that current-year results would be lower. Japan Display lowered both sales and margin outlook for the year as well.
Apple warned earlier this month that holiday sales would miss Wall Street expectations due to weakness in emerging markets.