(Bloomberg) — Shares in Asian suppliers to Apple Inc. extended losses on Wednesday after Bloomberg reported that the Californian company is scaling back plans to ramp up production of its new iPhones.
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Hon Hai Precision Industry Co., which assembles most of the world’s iPhones, fell as much as 2.9 percent, while Taiwan Semiconductor Manufacturing Co. fell to 1.8%. The fall in both stocks helped push Taiwan’s benchmark down as much as 2.3% to its lowest level since November 2020. Asia’s regional benchmark fell around 2% amid a hawkish Fed and a strong dollar.
The lackluster interest in Apple’s new products is just the latest sign of slowing global demand as central banks raise interest rates in their quest to cool inflation.
“Disappointing iPhone demand may ripple through the entire supply chain and hit Taiwan and Korea harder,” Bloomberg Intelligence analyst Marvin Chen said.
Apple has told suppliers to pull back from efforts to boost assembly of the iPhone 14 product family by up to 6 million units in the second half of this year after an anticipated increase in demand failed to materialize, they people familiar with the matter told Bloomberg News. .
Instead, the company will aim to produce 90 million phones in the period, about the same level as a year earlier and in line with Apple’s original forecast for this summer, the people said.
Among other key stocks, Hong Kong lens maker Sunny Optical Technology Group Co. fell as much as 3.7% and Taiwan’s Largan Precision Co. fell to 8.8%. LG Innotek Co. of South Korea, which gets 70% of its revenue from Apple, extended its decline to 9.2%.
For a list of some of Apple’s key suppliers worldwide, click here.
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