Shares tumbled more than five per cent as markets opened, after Apple reported a slowdown in revenue and iPhone sales that was worse than analysts had expected.
Imagination's exposure to Apple is around 50 per cent, according to analysts at Liberum. Fellow UK tech firms Laird and ARM also derive some of their revenue from Apple but are less exposed. Shares in the two firms fell 1.5 per cent and 0.25 per cent respectively.
Apple earlier this year held talks with Imagination Technologies over a possible takeover. While Apple eventually ruled it out "at this time", Apple chief Tim Cook indicated it was increasingly looking at M&A speaking on its earnings call on Tuesday evening.
"We believe Imagination could be a target once again in time," said Liberum in a note on Wednesday morning.
Suppliers in Asia also felt the impact of the Apple slowdown overnight.
Hon Hai Precision Industry, also known as Foxconn inched lower by less than one per cent, as did Taiwan Semiconductor Manufacturing.
South Korea's LG Display, which makes screens for Apple, dropped more than three per cent. It also reported a 95 per cent drop in operating profit in the first quarter, although that was better than expected.
Murata Maufacturing slipped more than four per cent while Catcher was down more than one per cent.