Asia-Pacific stock markets pulled back on Friday after two days of broad gains, with a downbeat outlook from Taiwan Semiconductor prompting declines in technology names.
The company, one of the world’s biggest chip makers, expects second-quarter sales to come in more than 10% below analysts’ estimates, citing soft demand for high-end smartphones. The forecast sent the Philadelphia Semiconductor Index down 4.3% Thursday in the U.S.
TSMC shares 2330, -6.34% were down almost 6% and on course for their worst day since 2013. The drop also pushed Taiwan’s benchmark Taiex stock index Y9999, -1.75% down 1.5% and pressured smartphone-component makers elsewhere in the region.
AAC 2018, -7.26% also slid 6% in Hong Kong, hitting an eight-month low, while lens maker Sunny Optical 2382, -4.70% declined 3%. In Japan, Tokyo Electron 8035, -2.05% fell 2.4% in the morning session, while South Korea’s Samsung 005930, -1.89% dropped 1.5%.
Taiwan Semi’s warning resulted in “brewing concerns of weak iPhone demand,” weighing on Apple suppliers, noted Jingyi Pan, a market strategist at IG Group. Apple AAPL, -2.83% shares fell 2.8% on Thursday.
However, investors shouldn’t have broader concerns about Taiwan Semi’s forecast, said Oriano Lizza, a sales trader at CMC Markets. “I don’t see this being a long-term issue.”