Asian technology stocks fell sharply as regional semiconductor names tracked a weak Wall Street session, with South Korea’s SK Hynix sliding more than 10% despite posting record quarterly profit and revenue.
Asian Semiconductor Stocks Extend Losses Following Wall Street Slump
Technology equities across Asia dropped on Wednesday, led lower by heavy losses in the semiconductor sector. The downturn followed another weak session for U.S. chip stocks overnight. In South Korea, SK Hynix shares dropped over 10% after the chip giant missed analysts’ estimates. Samsung Electronics lost more than 4%, LG Innotek fell 9%, and Seoul Semiconductor dropped over 6%, based on market trading figures.
The regional sell-off stems from ongoing deleveraging in South Korea alongside softer sentiment toward global technology equities, according to Kieron Poon, investment director of Asian equities at Aberdeen Investments. However, Poon noted in a Tuesday note that the recent volatility has not altered the firm’s long-term positive view on the sector.
Did you know?
TSMC is the world’s largest contract chip manufacturer.
Japan and Taiwan Chip Manufacturers Face Market Pressure
Japanese technology and memory shares mirrored the regional decline. Computer memory manufacturer Kioxia dropped 10%, Tokyo Electron fell 8.5%, and SoftBank Group lost more than 7% due to its exposure as an artificial intelligence investment proxy through its stake in Arm. In Taiwan, TSMC, the world’s largest contract chip manufacturer, traded 1.32% lower.
Across mainland China, the tech-heavy ChiNext 300 index lost 1.83%, while the Hang Seng China Semiconductor Chips Index fell more than 5%. These regional retreats came directly on the heels of broad declines across U.S. markets. Nvidia sank at the open before closing flat, Intel dropped nearly 6%, and AMD lost 8%. Memory and storage providers experienced steeper drops, with Micron and Seagate losing more than 8%, Western Digital sinking nearly 7%, and Sandisk shedding 14%, alongside a 9% drop for SK Hynix U.S. shares.
Aberdeen Views Tech Correction as an Opportunity
Despite the sharp pullback, Aberdeen Investments characterizes the market drop as an attractive entry point rather than a fundamental deterioration. According to Poon, the recent market correction brought valuations to more reasonable levels, creating opportunities to add exposure to high-quality businesses at lower prices.
While rising Chinese competition and ongoing questions surrounding artificial intelligence financing weigh on investor sentiment, the broader market remains healthy, Poon stated. He added that memory chipmakers will remain stable after giving back their sudden gains.
Bucking the broader regional downturn, Chinese internet stocks listed in Hong Kong moved higher. Tencent and Meituan climbed 3.6% and 2.7% respectively, while Alibaba, Baidu, and Kuaishou all traded in positive territory.
Frequently Asked Questions
Why did SK Hynix shares drop despite reporting record profit?
SK Hynix shares fell more than 10% because the company missed analysts’ estimates, contributing to a broader sell-off across Asian semiconductor stocks.
How did U.S. markets influence the Asian tech stock sell-off?
The declines in Asia followed another weak session for U.S. semiconductor stocks overnight, where companies like Intel, AMD, and memory providers Micron and Western Digital experienced significant losses.
Are all Asian technology stocks declining?
Stay Ahead of Market Trends
Choose CNBC as your preferred source on Google.