Silicon wafers with etched chips are seen as U.S. Vice President Kamala Harris tours a site where Applied Materials plans to build a research facility in Sunnyvale, California, on May 22, 2023.
Pool | Reuters
Asian semiconductor and technology stocks resumed their decline on Wednesday, tracking Wall Street’s overnight losses, after a brief recovery in chip makers lost momentum amid persistent concerns about soaring artificial intelligence-related valuations.
Japanese Softbank Group According to Bloomberg News, the company plunged 8.3% as tech stocks’ share price decline widened and efforts to secure at least $6 billion in margin loans backed by OpenAI stock stalled. The Japanese tech investment giant is exploring alternative financing options and may reconsider the loan at a later date.
Japanese chip equipment manufacturer Advantest and Renesas Electronics They closed down 4.2% and about 2%, respectively.
In South Korea, memory chip giant SK Hynix fell 7.5%, while Samsung Electronics fell 6.1%. Battery makers fell 3.6%, and display panel maker LG Display fell 7.6%.
Taiwan’s chip sector was also under pressure. The world’s largest chip manufacturer Taiwan Semiconductor Manufacturing Co., Ltd.fell about 2%, and Apple’s suppliers fell more than 5.2%.
The decline followed weak trading on Wall Street, where the tech-heavy Nasdaq Composite Index fell 0.97% and the S&P 500 Index fell 0.26%. The iShares Semiconductor ETF fell 1%, with the gains in semiconductor stocks quickly fading after accelerating gains the previous day.
AI-related funding appears to be diverting money away from established technology stocks. Upcoming listings such as SpaceX, Anthropic and OpenAI could absorb investor money that previously flowed into publicly traded technology companies, weighing on the sector.
OpenAI secretly filed for an initial public offering on Monday, adding to excitement around artificial intelligence investments. Meanwhile, SpaceX is scheduled to begin trading on Friday in what is expected to be the largest IPO in history. While some investors see the listing as another catalyst for AI’s rise, others worry that its $1.75 trillion valuation signals overheating in the sector.
Andrew Jackson, equity strategist at Otus Advisors, said recent volatility in technology stocks could prompt investors to invest in defense stocks, especially in Japan, where the government is expected to increase its focus on military preparedness.
Jackson cited defense contractors such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries, IHI and Japan Steel Works as potential beneficiaries, saying, “Heavyweights could come back into the spotlight following recent withdrawals as retail customers grit their teeth and look for something new to play with.”
