TAIPEI -- Foxconn, Apple's main iPhone supplier, saw December sales plunge by more than 8 percent on last year, as Taiwan's tech sector contracted year on year for the first time in 10 months.

Taiwan's key iPhone suppliers are feeling the effects of Apple's struggle to stir demand for its newest products. December revenues recorded by 19 Taiwanese tech companies tracked by the Nikkei Asian Review saw a 1.32% drop on the year to $1.22 trillion New Taiwan dollars ($398.39 billion), ending a consistent year-on-year rise since February. Stripping out the impact of the Chinese new year, it is the first year on year decline since November 2016.

The slump comes days after Apple shocked investors on Jan. 2 with the warning that revenues for the final three months of 2018 would come in below expectations, its first reduction in sales guidance in 16 years.

The iPhone maker's shares have shed more than 30% of their value since their peak in October, when the company was valued at over $1 trillion. Samsung Electronics and LG Electronics, both key display suppliers to iPhones, all warned this week of poor trading during the October-December quarter.

Apple, meanwhile, has asked its suppliers to produce on average 10% fewer new iPhones for the current January-March period, Nikkei Asian Review reported on Wednesday, signaling that it expected sales of its newest products to continue slowing in the new year.

The disappointing result for Taiwan's combined tech monthly sales echoed the trade-reliant island's export performance, showing a more than 3% decline on the year during December. Apple's supply chain contributes up to 12% to the island's gross domestic product annually, according to Yuanta Investment Consulting's estimate.

Foxconn, formally known as Hon Hai Precision Industry, and Taiwan Semiconductor Manufacturing Co., the sole iPhone processor chipmaker, are the island's biggest contributors to that supply chain. Both saw a year-on-year decline in their monthly sales last December. Foxconn's monthly revenues fell 8.27% in December against the same period last year, to NT$619.31 billion. TSMC's revenue edged back 0.07% to NT$89.83 billion from a year ago, ending a three-month run of growth.

The fall in revenues on last year was "mainly due to the relatively large scale decline in the consumer electronics segment," Foxconn said. The company's consumer electronics business is mainly its iPhone assembling business.

Other major iPhone component suppliers also felt the sting of sluggish iPhone sales in December. Foxconn's listed metal case making arm, Foxconn Technology -- not to be confused with the whole Foxconn group -- saw 60.18% of sales evaporate in December against last year. "As the peak season is marching toward an end and the global economy is slowing, orders are declining," the company said in a filing with the stock exchange.

Foxconn Technology is not in Nikkei's 19 tech companies' watch list but makes a majority of metal frames for iPhone XS, XS Max and splits orders with Catcher Technology for casings for the iPhone XR.

Catcher also saw a nearly 28% fall in revenue in December, while key iPhone camera lens maker, Largan Precision, not only lost 33.86% in sales for the last month of 2018, but its net profit for the October-to-December quarter contracted nearly 25% on the year.

The outlook was for further declines, the company indicated. "Revenue in this month [January] will be [at] a similar level to last month, and revenue next month will decline," Largan CEO Adam Lin told investors on Thursday. "The fewer working days due to new year holidays in February is only part of the reasons for the drop," Lin added.

Foxconn's rival Pegatron saw December 2018 sales expand over 2017 by 18.59%, but its revenue of NT$105.74 billion was down nearly 40% on the level recorded in November and is the second consecutive month of decline.

"A lower comparison base in 2017 was part of the reason behind the annual growth. We experienced sharp month-on-month sales decline as the slow season has already begun," Pegatron's spokesperson said. The figures were also affected by a later than usual product launch in 2018. iPhone XR, which is mainly assembled by Pegatron, only hit the shelves by late October 2018, a month later than its normal schedule.

Combined 2018 revenues for the 19 companies on the watch list did hit a record level at NT$12.25 trillion, the highest since Nikkei started the survey in 2013. However, the decline in December could signal the turn of the smartphone cycle. The nine Apple suppliers on the list generated 84% of the total revenue that Nikkei monitors in Taiwan.

"Looking forward to 2019, it's almost a consensus that iPhone would face a decline in unit shipments --which could hit all the suppliers," said Eddie Han, an analyst at Taipei-based Market Intelligence & Consulting Institute.

It would be a challenge for the U.S. company to maintain iPhone shipments of 200 million units this year, Han said.

"The uncertainties brought by the trade war would be adding factors that weigh on the tech industry," the analyst added.

Arthur Liao, an analyst at Fubon Securities, said in a client note on Thursday that Apple suppliers were sitting on 6 to 8 weeks inventory of components "versus the normal inventory level of 2 weeks."

According to Liao's supply chain checks, Apple has asked most of its Asian suppliers to cut their prices by about 10% to help offset the hit from the U.S.-China trade battle. Earnings from Asian assemblers like Foxconn, Pegatron, display maker of Japan Display Inc., audio part supplier AAC Technology Holding, and other "will be terrible for the first half of 2019," Liao said.

Nikkei staff writer Chien Chia-hung contributed to this report