Selloff in Asian Semiconductor Stocks Following Nvidia Decline

Post by : Bianca Suleiman

Asian semiconductor stocks experienced a significant downturn on Friday, primarily influenced by SoftBank, after Nvidia shares plummeted in the U.S., despite the tech company reporting earnings that exceeded expectations.

SoftBank, which has recently divested its Nvidia shares but still maintains control over British chip designer Arm, saw its stock drop over 10% in Tokyo. This conglomerate is also linked to multiple AI initiatives utilizing Nvidia technology, including the ambitious $500 billion Stargate project for U.S. data centers.

In South Korea, SK Hynix, a principal provider of high-bandwidth memory for AI uses, fell by 8.76%. Additionally, Samsung Electronics, a significant memory supplier for Nvidia, dropped 5.77%. Taiwan Semiconductor Manufacturing Company (TSMC), recognized as the largest contract chipmaker globally and a producer of Nvidia chips, concluded the day at a 4.81% decrease.

Other leading declines included Hon Hai Precision Industry (Foxconn), which saw a drop of 4.86%, as it manufactures AI server racks. Smaller companies were also affected: Renesas Electronics from Japan decreased by 2.65%, Tokyo Electron fell by 7.14%, Lasertec dropped 5.15%, and Advantest experienced a decline of 12.1%.

This selloff occurred despite Nvidia's positive forecast for the fourth quarter. Analysts argue that this retreat mirrors widespread market anxiety over issues such as potential AI bubble concerns, tightening financial conditions, and ambiguities regarding Federal Reserve rate adjustments.

The downturn on Friday emphasizes the vulnerability of Asian chip stocks to U.S. tech dynamics, especially within the AI and semiconductor industries, highlighting the intricate links between global supply chains and investor confidence.