Post by : Badri Ariffin

On Friday, Asian semiconductor shares plummeted, with SoftBank leading the decline after Nvidia's surprising dip in the U.S. market, even as the tech firm posted stronger-than-anticipated earnings.

After recently divesting its Nvidia shares, SoftBank, which retains ownership of British chip designer Arm, fell more than 10% in Tokyo. The conglomerate is also linked to several AI initiatives that utilize Nvidia's technology, including the ambitious $500 billion Stargate project for U.S. data centers.

In South Korea, SK Hynix, a vital supplier of high-bandwidth memory for AI needs, saw an 8.76% drop, while Samsung Electronics, another significant memory supplier for Nvidia, decreased by 5.77%. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker and producer of Nvidia’s designs, closed the session down 4.81%.

Other significant declines included Hon Hai Precision Industry (Foxconn), which fell 4.86%, as it manufactures server racks for AI operations. Smaller suppliers also felt the strain: Japan’s Renesas Electronics decreased by 2.65%, Tokyo Electron fell 7.14%, Lasertec dropped 5.15%, and Advantest lost 12.1%.

The selloff persists despite Nvidia’s positive projections for the fourth quarter. Analysts point to broader market anxieties, such as ongoing discussions about an AI bubble, stricter financial conditions, and uncertainties surrounding Federal Reserve rate cuts.

This decline underscores the vulnerability of Asian chip stocks to fluctuations in the U.S. tech sector, particularly within AI and semiconductor industries, highlighting the interconnection of global supply chains and investor sentiment.

#Asia News