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Asian tech stocks extended their selloff on Monday as the U.S. tech-heavy Nasdaq fell more than 4.5% last week as investors grew weary of global AI developments.
South Korea’s Kospi index memory chip giants Samsung Electronics and SK Hynix fell 5% and 2%, respectively. The Kospi fell by as much as 8%, with both companies accounting for more than 40% of the index.
Taiwan Semiconductor Manufacturing Co., Ltd.TSMC (TSMC) fell 2.1%, while Hon Hai Precision, also known as Foxconn, fell 5.1%.
Japanese tech investors Softbank Group fell 7.5%, while Tokyo Electron and Advantest fell 6.7% and 5%, respectively.
The decline follows a recent rally in Asian tech stocks, supported by investor optimism about AI demand. Last month, Samsung Electronics and SK Hynix each surpassed $1 trillion in market valuation, and SoftBank recently became Japan’s most valuable company.
Tech stocks were triggered last week after Broadcom’s fiscal second-quarter revenue fell short of market expectations, sending its stock price plummeting and having a knock-on effect on the tech industry.
The VanEck Semiconductor ETF (SMH) fell more than 9% on Friday. Arm Holdings, a British semiconductor company owned by SoftBank, fell nearly 13%, and Micron Technology fell more than 13%.
According to a June 8 UOB note, “The tech-driven crash wiped out approximately $1.8 trillion in market capitalization from the S&P 500.”
But UOB said tech and software companies will continue to be in the spotlight due to “the debut of a space exploration/AI/technology company on the Nasdaq on Friday (June 12) in what may be the largest IPO in history.”
Asian markets also fell broadly on Monday, as a new escalation in the Iran war shows the conflict is far from over.
