Asian chip stocks tumble as Nasdaq sell-off spreads
Asian technology stocks suffered steep losses Friday after a severe sell-off on Wall Street sent the Nasdaq Composite down 5.5% and more than 10% below its recent peak, placing the index in correction territory. The decline reflected renewed doubts about the sustainability of the artificial-intelligence investment boom, including whether the enormous sums being committed to data centers will generate sufficient returns.
South Korean chipmaker SK Hynix fell more than 8%, while Samsung Electronics lost 7%. LG Innotek dropped 10% and LG Display declined 7.7%. Japanese semiconductor shares were also hit hard: chip-testing equipment maker Advantest plunged 12.2%, Tokyo Electron fell 7.3% and SoftBank Group slid 11.6%. Kioxia Holdings lost nearly 10%, while Renesas Electronics declined 7.5%.
Taiwanese technology companies faced similar pressure. TSMC fell 9.6%, and electronics manufacturers Hon Hai Precision Industry, also known as Foxconn, and Foxconn Technology dropped 9.4% and 9.1%, respectively. The Philadelphia Semiconductor Index fell 12.2%.
Investors were particularly concerned that the Democrats’ sweeping victory in the U.S. midterm elections could bring tighter restrictions on data-center construction, weakening demand for AI chips and related equipment. Goldman Sachs strategist Timothy Moe said political opposition to the scale and speed of U.S. data-center development could affect the revenues and profits of Asian hardware suppliers. He described the market reaction as a combination of position unwinding, stop-loss selling and heightened volatility.
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