Apple's Frankfurt-listed shares dropped nearly 5pc after the company said it would miss its March quarter sales outlook due to the epidemic, which has killed more than 1,800 people and forced businesses to shut operations.
Shares of STMicroelectronics NV and Dialog Semiconductor PLC, which supply components to Apple, fell 3pc and 4.8pc, respectively.
The technology-heavy German stock index plunged 0.7pc, while the European tech subindex fell 1pc.
While the sector has risen more than 7pc this year on hopes of demand recovering on the back of easing global trade tensions, the virus outbreak may reverse those gains given China's large presence in the technology supply chain.
"Just because stock markets rallied to all-time highs (recently), does not mean that everything is okay," said David Madden, analyst at CMC Markets in London.
"We haven't heard about what the actual economic impact of the crisis is going to be, not to mention all the disruption."
The pan-European STOXX 600 index fell 0.6pc by 0851 GMT, having ended at a record high on Monday after China outlined fresh stimulus measures to mitigate the virus' economic impact.
However, Apple's warning, along with news of a slower-than-expected recovery in the firm's Chinese factories, swiftly culled any optimism.
"Apple is a big bellwether, and because it's so huge, it's the kind of company that can influence entire financial markets," CMC Markets' Madden added.
Other China-exposed sectors in Europe, such as automobile and basic resources, dropped more than 1pc each.
The two depend heavily on Chinese demand for their goods, with several car makers also manufacturing parts in the country.
Among individual movers, lender HSBC Holdings PLC fell 4.7pc and was one of the biggest drags on the STOXX 600 after it said it would shed $100 billion in assets and cut 35,000 jobs over three years in a drastic overhaul.
Pipeline gear maker Tekmar Group plunged nearly 33pc after it said the virus outbreak had halted all shipments to China.
Defensive sectors utilities and real estate were among the few gainers.