Shares of Korean companies that supply key components to Apple turned lower alongside a sharp drop in Apple's stock. The decline came after Apple said it raised prices for its MacBook and iPad due to the burden of memory chip costs. Investors are seen to have offloaded Apple-related stocks, unable to rule out the possibility of a future decline in Apple's memory demand.
According to the Korea Exchange Thursday, LG Innotek (011070) closed at 931,000 won, down 22,000 won, or 2.31%, from the previous trading day. In the Nextrade aftermarket following the regular session, it slid a further 3.36% to 921,000 won. LG Innotek holds a leading market position in camera module manufacturing and has long been responsible for the camera modules in iPhones.
Like LG Innotek, the shares of companies that supply semiconductor-related equipment to Apple closed broadly lower that day. BH (090460), a KOSDAQ-listed company that supplies flexible printed circuit boards (FPCB) to Apple, closed at 19,980 won, down 870 won, or 4.17%, from the previous session. Jahwa Electronics (033240), another Apple component-related stock, also recorded a 5.57% decline.
The moves are seen as the result of investors shifting to sell positions after Apple's stock plunged more than 6%. Even as U.S. memory chipmaker Micron set a record high in earnings, Apple fell 6.12% on Tuesday, sending the Nasdaq index lower for a fourth consecutive trading day. The trigger was Apple's announcement that it would raise prices for its flagship MacBook and iPad products. As the market took this as a precursor to inflation, investment funds are seen to have exited.
The development also had a negative impact on the global semiconductor rally. This is because Apple cited the burden of memory chip costs as the reason for the price hike. The semiconductor rally had been supported by expectations that memory demand would continue for some time. However, the fact that consumer goods companies feel burdened by memory prices implies that future memory demand could contract, leading large semiconductor stocks not only in Korea but also in Japan (Kioxia) and Taiwan (TSMC) to weaken in tandem.
While the securities industry pointed to concerns over declining memory demand stemming from Apple's price hike as the cause of the day's market decline, some analysts also argued there is little need to overreact. "Concerns over a decline in memory demand are somewhat excessive," said Han Ji-young, an analyst at Kiwoom Securities. "It is worth noting that AI investment demand from hyperscalers such as Meta and Alphabet remains intact."
