CUPERTINO, CALIFORNIA – SEPTEMBER 12: The new iPhone 15 Pro is displayed throughout an Apple occasion at the Steve Jobs Theater at Apple Park on September 12, 2023 in Cupertino, California.
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Shares of Apple suppliers fell in Asia on Wednesday after Barclays downgraded the iPhone maker on considerations that demand for its merchandise would stay weak in 2024.
Taiwan Semiconductor Manufacturing Company fell greater than 2% in Wednesday morning buying and selling. TSMC is a prime producer of the world’s most superior processors for corporations akin to Apple and Nvidia.
Another main Apple provider Hon Hai Technology Group, also called Foxconn, dropped 1.33%. Taiwan-based Foxconn is the world’s largest contract electronics maker and assembles Apple’s iPhones.
Technology and chip shares together with Samsung Electronics and SK Hynix dropped greater than 2%, whereas LG Electronics fell 1.78%, dragging South Korea’s Kospi decrease 1.85%.
“We’re seeing that suppliers are nonetheless seeing sturdy development on the iPhone 15. We’re in the center of a supercycle,” mentioned Ray Wang of Silicon Valley-based Constellation Research on CNBC’s “Street Signs Asia.”
“There’s nonetheless 200 to 300 million iPhones that get changed onto 5G, not less than for the subsequent 24 months, so I’m undecided precisely the downgrade on development, however on valuation, I can perceive perhaps that is the place the hit might be,” Wang instructed CNBC on Wednesday.
On Tuesday, Barclays downgraded Apple’s stock to underweight and trimmed its worth goal to $160 from $161, citing weak point in iPhone 15 gross sales, signaling possible decrease demand for iPhone 16 and different merchandise. Apple shares closed 3.58% decrease on Tuesday.
“We are nonetheless selecting up weak point on iPhone volumes and blend, in addition to an absence of bounce-back in Macs, iPads and wearables,” mentioned analyst Tim Long on Tuesday, in a notice to purchasers.
UBS in a Jan. 3 report mentioned that TSMC was “poised for a robust rebound in 2024” and maintained a purchase ranking regardless of trimming its worth goal to 750 Taiwan {dollars} from 760 Taiwan {dollars}.
“We assume TSMC is in a candy spot for development over the subsequent 18 months from its very excessive share on 4-nanometer and 3-nanometer and leverage to builds on cloud AI plus positioned to learn from any rise in edge AI lifting massive endpoint markets of PC, smartphone and IoT,” mentioned UBS.
– CNBC’s Shreyashi Sanyal contributed to this report.