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FinanceJapanese AI and chip stocks plunge as US semiconductor rout spreads to Asia
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Japanese AI-linked stocks suffered heavy losses on Friday, tracking a fresh sell-off in U.S. semiconductor shares that spread across Asia. SoftBank Group fell 8.8%, Tokyo Electron lost 9%, and Advantest slid 9.4%. Memory chipmaker Kioxia plunged over 14% after a Texas jury ordered it to pay $229 million in damages for patent infringement. The declines followed a weak session on Wall Street, where the Nasdaq Composite dropped 1.47% and the VanEck Semiconductor ETF fell nearly 4%. TSMC raised its full-year capital expenditure forecast to between $60 billion and $64 billion, but investors focused on concerns that the industry's aggressive investment cycle may be increasingly difficult to justify. Strategists described the sell-off as an unwinding of crowded AI momentum trades rather than a deterioration in long-term fundamentals. South Korean markets were closed for a public holiday.
Source report
Japanese technology stocks tumbled on Friday as a fresh sell-off in U.S. semiconductor shares rippled across Asia, intensifying concerns over AI-related spending.
Key Market Movers
- SoftBank Group fell 8.8%
- Tokyo Electron dropped 9%
- Advantest slid 9.4%
- Kioxia plunged over 14% after a federal jury in Texas ordered the firm to pay $229 million in damages for infringing a Viasat patent related to computer memory technology
South Korea's markets were closed for a public holiday. On Thursday, shares of SK Hynix closed over 11% lower.
U.S. Tech Weakness
The declines followed another weak session for U.S. technology stocks:
- Nasdaq Composite fell 1.47%
- VanEck Semiconductor ETF dropped nearly 4%
- Arm Holdings declined more than 5%
- Micron Technology, Advanced Micro Devices, and Broadcom each lost over 5%
- U.S.-listed shares of SK Hynix slumped more than 13%
TSMC's Capex Raise Fails to Reassure
TSMC raised its full-year capital expenditure forecast to between $60 billion and $64 billion, up from $52 billion to $56 billion. However, investors focused on concerns that the industry's aggressive investment cycle may be increasingly difficult to justify.
Analyst Commentary
"Another wipe out for U.S. tech and AI with recent momentum winners taking another leg lower after TSMC's earnings yesterday in Asia were not seen as strong enough to justify further upside for the sector and raising concerns over excessive spending."
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— Andrew Jackson, Strategist at Ortus Advisors
Jackson noted that the sell-off reflected an unwinding of crowded AI momentum trades rather than a deterioration in the sector's long-term fundamentals.
Broader Context
The latest losses extend a sharp reversal in global AI-related shares after months of outsized gains. Investors are increasingly questioning whether lofty valuations can be sustained as spending on AI infrastructure continues to accelerate.
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Source
US Top News and AnalysisWestern
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