Wall Street's slide sets off a region-wide rout
A steep overnight decline in New York fed directly into Asian trading on Friday. The Nasdaq Composite dropped 5.5% and finished more than 10% under its latest high, while the Philadelphia Semiconductor Index fell 12.2%. Investors were reassessing whether the enormous sums being poured into artificial intelligence infrastructure will produce the returns expected of them, and the resulting caution hit chipmakers hardest.[S1]
The shock traveled quickly across Asia's technology-heavy exchanges. South Korea's market fell hard enough to trigger a trading halt, and Japan's Nikkei moved close to bear-market territory, according to headline reports from several outlets. Coverage across the region described a broad retreat by investors from semiconductor and hardware names rather than losses confined to a single exchange.[S2][S6][S7]
Several independent outlets framed the session the same way: Asian equities were following the American slump as the AI trade lost momentum. Their headlines described chipmakers and technology shares across the region falling together, with the Korean market among the most affected.[S3][S4][S5]
Korean and Japanese chipmakers take the heaviest hits
South Korea's semiconductor champions suffered some of the largest declines. SK Hynix fell more than 8% and Samsung Electronics lost 7%, while LG Innotek dropped 10% and LG Display 7.7% as selling spread through the country's technology sector. Before the regular session opened, Korean chip shares had already been indicated down about 10%, a sign of how forcefully the previous night's U.S. move was being priced in.[S1][S8]
In Japan, chip-equipment maker Advantest plunged 12.2% and Tokyo Electron slid 7.3%. SoftBank Group, the technology investment giant, tumbled 11.6%. Memory maker Kioxia Holdings fell nearly 10% and Renesas Electronics declined 7.5%, leaving few large technology names in Tokyo untouched by the day's selling.[S1]
Taiwan and China join the retreat
Taiwan's contract chipmaker TSMC slid 9.6%, and electronics manufacturers Hon Hai Precision Industry, known as Foxconn, and Foxconn Technology fell 9.4% and 9.1% respectively. On the mainland, the technology-focused STAR Market and the ChiNext Artificial Intelligence Index each dropped more than 4%, drawing Chinese listings into the same regional wave of selling.[S1]
Politics and positioning add to the pressure
Market participants were assessing whether the Democrats' broad midterm win in the U.S. might usher in stricter rules on building data centers, which could dampen demand for AI processors and the related infrastructure. Timothy Moe, Goldman Sachs' chief Asia Pacific equity strategist, told CNBC that position unwinding, stop-loss trades and heightened volatility had deepened the slide across Asian markets.[S1]
Moe said possible political resistance to U.S. data-center building could affect demand and profits for Asian suppliers of AI hardware. He described a market that reacts before it analyzes, and said that pattern appeared to be driving the current moves.[S1]
