Why is Taiwan Semiconductor (TSM) stock down today?

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Taiwan semiconductor (NYSE:TSM) the stock is not doing so well on Wednesday on reports that Apple (NASDAQ:AAPL) decreases iPhone 14 production levels.

Recent reports claim that Apple has reduced its iPhone production orders from 96 million units to 90 million units. These reports come with damage to the stock of Apple’s iPhone 14 component suppliers, such as TSM stock.

Apple was hoping to see an increase in demand for its iPhone 14, which is why it was ordering more units. However, this request did not come as expected. Now the tech company is returning to its original estimate of 90 million units for 2022.

Bloomberg Intelligence analyst Marvin Chen said the following about the news at Bloomberg:

Disappointing iPhone demand could ripple through the entire supply chain and have the biggest impact on Taiwan and Korea.

Macroeconomics likely affecting demand

It should also be noted that the 90 million units expected by Apple for the iPhone 14 in 2022 correspond to last year’s shipments. So while demand is not increasing this year, the company is also not seeing a drop in demand.

Investors will keep in mind that the macro economy could affect demand for Apple’s iPhone 14. The product is more of a luxury device, and luxury purchases are typically impacted during a recession or as inflation rises.

TSM stock is down 2.2% on Wednesday morning and 44.5% since the start of the year.

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As of the date of publication, William White had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to publishing guidelines.


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