Apple Supplier Shares Slide After Trump Tells Tech Giant to Make Products in US

September 10, 2018 Updated: September 10, 2018

TAIPEI—Shares of Apple suppliers fell across Asia on Sept. 10 after U.S. President Donald Trump tweeted that the tech giant should make products in the United States if it wanted to avoid tariffs on Chinese imports.

Trump’s comment came after Apple told U.S. trade officials on Sept. 7 that proposed tariffs by Washington in an escalating trade war with China would affect prices for a “wide range” of Apple items, including the Apple Watch. It did not mention the iPhone.

Shares in China-based firms Apple suppliers Luxshare Precision, Shenzhen Sunway Communication, and Suzhou Dongshan Precision Manufacturing all dropped as much as 10 percent.

Lens Technology, Universal Scientific Industrial Shanghai, and Suzhou Anjie Technology fell between 6 and 8 percent.

In Taiwan, camera lens-maker Largan Precision slid nearly 8 percent, Foxconn (formally known as Hon Hai Precision Industry), a major manufacturer of Apple products, fell 3.4 percent, while assembler Pegatron dropped nearly 4 percent.

Taiwan’s ASE Technology Holding, which counts Apple as one of its top clients, fell 2.9 percent.

Chien Bor-yi, an analyst at Taipei-based Cathay Futures Consultant, said Apple’s component supply chain in Taiwan would take a major hit if the United States increased tariffs on Chinese imported products.

“People have concerns about the stock market. It’s not a seller’s market, but it’s also not a buyer’s market. No one knows how deep the well is,” he said.

The technology sector is one of the biggest potential losers in the $200 billion tariff list proposed by Washington on Chinese imports because the tariffs would make imported computer parts more expensive.

Trump warned on Sept. 7 that he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on a further $267 billion of goods.

Hong Kong-listed AAC Technologies fell more than 5 percent. The company supplies acoustic components and haptic technology—which enables users to receive tactile sensations from an interface—for Apple products such as the iPhone, iPad, and Apple Watch.

In Japan, Nissha, which supplies 3D touch sensor technology to Apple, eased 0.4 percent, Japan Display fell 0.7 percent, and Sharp Corp dropped nearly 1 percent.

“People are in a bit of a panic today. Looking forward, the focus would be on how the market reacts after Apple releases its latest models,” said Kevin Chung, analyst at Jih Sun Securities Investment Consulting.

By Loh Liang-sa, Yimou Lee & Anne Marie Roantree