Asian Technology Stocks Extend Sell-Off as SoftBank, Chipmakers Slide on AI Weakness
Asian technology stocks extended their losses on Wednesday as semiconductor companies and AI-related firms came under renewed selling pressure following another weak session for U.S. chip stocks.
Japan's SoftBank Group fell more than 7%, while memory chipmaker Kioxia declined around 10% and semiconductor equipment manufacturer Tokyo Electron dropped 8.5%, reflecting broad weakness across the region's technology sector.
In South Korea, SK Hynix plunged more than 10% despite reporting record quarterly revenue and profit. Investors reacted negatively after the company's earnings missed analysts' expectations. Samsung Electronics declined over 4%, while LG Innotek lost approximately 9% and Seoul Semiconductor fell more than 6%.
Taiwan's TSMC, the world's largest contract chipmaker, also traded lower, slipping around 1.3%.
The regional decline followed another weak trading session in the United States, where semiconductor stocks remained under pressure. Intel fell nearly 6%, AMD lost around 8%, while memory-chip companies including Micron Technology and Seagate Technology each dropped more than 8%. Western Digital declined nearly 7%, and SanDisk fell about 14%. AI chipmaker Nvidia erased early losses to finish the session largely unchanged.
Technology shares in China also weakened. The ChiNext 300 Index declined 1.8%, while Hong Kong's Hang Seng China Semiconductor Chips Index dropped more than 5%.
However, Chinese internet companies outperformed the broader technology sector. Tencent gained 3.6%, Meituan rose 2.7%, while Alibaba, Baidu, and Kuaishou also traded higher.
Market participants said investors continue to reduce exposure to semiconductor stocks following the strong AI-driven rally seen over the past year.
"The latest weakness in Asian chip stocks reflects the ongoing deleveraging process in Korea and softer sentiment toward global technology stocks," Kieron Poon, Investment Director of Asian Equities at Aberdeen Investments, said in a market note.
Despite the recent decline, Aberdeen Investments maintained its positive long-term outlook on the semiconductor sector, saying the pullback has created more attractive valuations for quality technology companies.
David Riedel, founder and president of Riedel Research Group, said the recent weakness represents investors giving back part of the gains generated during the rapid AI rally rather than signaling a broader deterioration in market fundamentals.
Investors are expected to closely monitor upcoming corporate earnings and developments in the AI sector as markets assess whether the recent correction presents buying opportunities or signals a prolonged period of volatility.
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