It's a move that's seen by analysts as a signal of slowing demand for Apple's latest devices - the iPhone 6S and the 6S Plus.
On Tuesday, Nikkei reported Apple was expected to reduce its production of iPhone 6S and iPhone 6S Plus handsets to 30% below its previous projections during the quarter ending in March. Low orders from Apple mean that those suppliers don't need as much staff as they previously did to cater to the iPhone's stellar demand, which has resulted into idle capacity and layoffs.
Apple declined to comment on the report but one Taiwanese supplier pointed out that the main iPhone assembler, Foxconn, was allowing workers time off at Chinese New Year in February whereas it used to pay them overtime to keep production running through the holiday.
Among LCD panel makers, Japan Display fell 4.7 percent, while LG Display fell 3.4 percent. The predicted launch of the iPhone 7 this September will shift around 250 - 255 million units. Other suppliers such as Japan's Murata Manufacturing, Alps Electric and TDK Corp dropped between 3 and 4 percent. Yet, an analyst at Moor Insights & Strategy, Patrick Moorhead, said he was somewhat doubtful regarding the creation reduction reports.
The Wall Street Journal claims, citing "three sources familiar with Apple's supply chain", that the company has notified its suppliers in China to slow down production.
Wall Street had been getting cynical about Apple's ability to make record products sales when the smartphone market was saturated and the Chinese market was in the doldrums. Since early December, about a third of the analysts tracked by Thomson Reuters have trimmed their estimates on Apple.
Normally, Apple is expected, for financial 2016, to grow sales by a far cry from the 28% sales growth it achieved, under 4%.