Tech stocks were mugged across Asia as investors started fretting that the AI boom might be running out of puff.
According to the Financial Times, Tech stocks tumbled, adding to a rotten month for the sector, as worries about the durability of AI hype intensified ahead of results from three of Silicon Valley’s biggest outfits this week.
South Korea’s Kospi led the kicking in Asia, falling more than 10 per cent after investors dumped shares in the country’s two leading memory-chip makers. Shares in SK Hynix fell as much as 10 per cent, while its larger rival Samsung Electronics dropped more than 12 per cent.
In Tokyo, the Nikkei 225 fell 4.4 per cent, with memory-chip maker Kioxia plunging 18 per cent.
Chipmakers have been hit particularly hard in the latest sell-off, after enjoying a blistering rally during the first half of the year. In Europe, ASML, the world’s biggest maker of chip-manufacturing gear, was 2.2 per cent lower, even as the broader market opened flat.
The steep falls across Asia followed a mixed performance among the cocaine nose jobs of Wall Street overnight, with the Nasdaq closing down just 0.2 per cent.
Futures tracking the Nasdaq pointed to a one per cent drop at the open on Tuesday. The declines follow weeks of turmoil for the tech sector, as doubts grow over whether record-breaking AI investment plans by America’s biggest tech companies will pay off.
Amazon, Meta and the Fruity Cargo Cult Apple all report second-quarter results this week, along with SK Hynix.
In China, shares in memory-chip maker CXMT fell more than three per cent, a day after it raised $8.5bn in a blockbuster Shanghai listing. Its shares rose 466 per cent on Monday.
Signs that Chinese AI companies are making progress have added to investors’ twitchiness.
Deutsche Bank analyst Jim Reid said: “Tech concerns have been the dominant driver in Asia this morning as renewed worries over AI investment spending, and competition from cheaper Chinese companies, have triggered another sell-off in global semiconductor stocks.”
Seoul-listed shares of SK Hynix have plunged about 45 per cent since hitting a record high above 3mn won (€1,795, $2,041) in June. That slump has wiped about $570bn from its market value, after the shares had tripled this year before peaking.
Concerns about future oversupply have soured the mood following the aggressive expansion plans of South Korea’s leading chipmakers.
SK Hynix and Samsung plan to build two new chip plants each in South Korea as part of a combined 800tn won (€466bn, $530bn) investment to double DRAM production capacity during five years.
US rival Micron Technology has raised planned domestic investment to $250bn by the end of 2035.
