A disappointing forecast from a key Apple chip partner drove shares of iPhone suppliers lower.
Taiwan Semiconductor Manufacturing said Thursday that its revenue forecast range for the second quarter is $7.8 billion to $7.9 billion versus the Wall Street estimate of $8.8 billion.
"Moving into second quarter 2018, continued weak demand from our mobile sector will negatively impact our business," the company's chief financial officer, Lora Ho, said in a statement.
TSMC is the world's largest semiconductor foundry company and manufactures chips for Apple and its component suppliers.
Morgan Stanley said Apple's iPhone was a big reason for TSMC's poor guidance.
"Smartphone semi weakness [is] the main reason for the revenue shortfall," analyst Charlie Chan wrote in a note to clients Thursday. "Beside the order cuts from the current Apple iPhone X processor, we attribute the major revenue shortfall in the smartphone segment to key customer MediaTek ... and around a month's delay of Apple's new 7nm processor to July."
Apple did not immediately respond to a request for comment.