Asian technology stocks fell sharply on Tuesday as a sell-off in US semiconductor shares spread across regional markets, with concerns about artificial intelligence investment, access to capital and intensifying competition from Chinese chipmakers weighing on investor sentiment.
South Korean memory chipmakers suffered some of the steepest declines. SK Hynix, a leading supplier of high-bandwidth memory (HBM) chips used in artificial intelligence applications, plunged more than 8%, while Samsung Electronics fell 7.9%. Both shares reached their lowest intraday levels since August.
In Japan, SoftBank Group, which has significant exposure to the global AI industry, dropped 8.03%, leading a broader retreat in technology and semiconductor-related stocks. Tokyo Electron, a major supplier of chipmaking equipment, fell 6.6%, while semiconductor testing equipment manufacturer Advantest declined 5.38%. Lasertec lost 4.76%, Disco fell 4.83% and Renesas Electronics shed 5.89%.
The regional losses followed a weak session on Wall Street on Monday, when the Nasdaq Composite fell 0.44%. US memory chipmaker Micron Technology declined 3.9% as investors assessed growing competition from China’s ChangXin Memory Technologies (CXMT), which reported progress in developing a new chip structure designed to increase memory density by storing more data in a smaller space.
CXMT announced the development over the weekend, intensifying concerns about the competitive position of established memory manufacturers. Its shares fell more than 2% on Tuesday.
Vey-Sern Ling, UBP’s senior equity adviser, said investors were taking profits on AI-related shares that had performed strongly during the year, particularly memory stocks.
“Investors are jittery and looking for excuses to take profit on AI-related stocks that have outperformed this year, especially memory stocks,” Ling said.
He cautioned that Chinese memory manufacturers could eventually affect the global balance between supply and demand, but said they continued to face technological challenges, particularly in more advanced products such as HBM.
“In the short run they continue to face technology hurdles, especially for more advanced memory like HBM,” he told CNBC.
Phillip Wool, chief market strategist at Rayliant Global Advisors, said CXMT’s progress represented a significant development for Chinese semiconductor manufacturers, demonstrating their ability to overcome technology restrictions and potentially challenge established competitors sooner than expected.
However, he said the market reaction appeared disproportionate to the immediate competitive threat because CXMT had yet to demonstrate large-scale production and continued to lag Samsung and SK Hynix in market share.
“More importantly, we’re not even talking about HBM here, and the Korean chipmakers are still unquestionably dominating that space, with very little threat at all from the likes of CXMT or anyone else for the foreseeable future,” Wool said.
He attributed the sharp declines to broader uncertainty about the sustainability of the AI investment boom rather than a fundamental change in the competitive position of established chipmakers.
“I read that more as a sign of how vulnerable AI sentiment is at this moment,” Wool said, adding that volatility could continue as investors reassess chip demand and the ability of semiconductor manufacturers to maintain their pricing power.
Concerns over financing have added to the uncertainty. The chief executives of Intel and Broadcom have warned that access to capital could become a major constraint on the AI boom, even as demand for computing infrastructure continues to exceed supply.
Investors are also awaiting a busy week of corporate earnings announcements and US inflation data, which could provide further indications of the economic outlook and the direction of interest rates. Higher interest rates can weigh on growth stocks by reducing the relative attractiveness of future earnings.
The latest sell-off reflects growing scrutiny of the AI sector’s investment requirements and competitive pressures as investors assess whether the demand for advanced computing infrastructure can sustain semiconductor companies’ recent gains.
