CUPERTINO, CALIFORNIA – SEPTEMBER 12: The new iPhone 15 Pro is on display during an Apple event at the Steve Jobs Theater at Apple Park on September 12, 2023 in Cupertino, California.
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Another major Apple supplier, Hon Hai Technology Group, also known as Foxconn, fell 1.33%. Foxconn, based in Taiwan, is the world's largest contract electronics manufacturer and assembles Apple's iPhones.
Technology and chip stocks including Samsung Electronics and SK Hynix fell more than 2%, while LG Electronics fell 1.78% and pushed South Korea's Kospi down 1.85%.
“We see that suppliers are still seeing robust growth for the iPhone 15. We're in the middle of a supercycle,” Ray Wang of Silicon Valley-based Constellation Research said on CNBC's “Street Signs Asia.”
“There are still 200 to 300 million iPhones that will be replaced by 5G, at least for the next 24 months. So I'm not sure if that's exactly what's going to be downgraded in terms of growth, but in terms of valuation, I can imagine that maybe that's where the hit will be,” Wang told CNBC on Wednesday.
On Tuesday, Barclays downgraded Apple shares to Underweight and lowered its price target to $160 from $161. The company pointed to weak iPhone 15 sales, which suggests likely lower demand for iPhone 16 and other products. Apple shares closed 3.58% lower on Tuesday.
“We are still seeing weakness in iPhone volumes and mix, as well as a lack of recovery in Macs, iPads and wearables,” analyst Tim Long said in a note to clients on Tuesday.
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UBS said in a Jan. 3 report that TSMC is “poised for a strong recovery in 2024” and maintained a Buy rating, although it lowered its price target to $750 from $760.
“We believe TSMC is well-positioned to benefit from any surge in edge AI over the next 18 months due to its very high share of 4-nanometer and 3-nanometer technologies and the leverage built on cloud AI “to benefit from PC, smartphone and IoT that drives large endpoint markets,” said UBS.
—CNBC's Shreyashi Sanyal contributed to this report.