Asian technology stocks fell on Tuesday after a sell-off in U.S. chip shares spread across the region. South Korea's KOSPI fell 5.8% as investors reacted to Chinese memory-chip progress and worried about AI financing.
Asian technology stocks fell Tuesday as a sell-off in U.S. semiconductor shares spilled into regional markets, with worries over AI financing and intensifying competition denting sentiment.
Korean and Japanese chip names drop
CNBC reported that SK Hynix plunged more than 10%, while Samsung Electronics shed 7.4%. Both hit their lowest levels since August. Investing.com put the declines at 8.9% for SK Hynix and 8% for Samsung.
South Korea's KOSPI fell 5.8%, after dropping more than 7% earlier. Japan's Nikkei 225 lost 1.9%, while Hong Kong's Hang Seng slipped 0.09%.
In Japan, SoftBank Group sank 8.5%. Tokyo Electron dropped 7.2%, and Renesas Electronics shed 5.9%.
Chinese memory-chip progress rattles investors
The declines followed a weak Wall Street session, where the Nasdaq Composite dropped 0.44% on Monday. Micron Technology slid 3.9% as investors assessed competition from China's ChangXin Memory Technologies (CXMT), which reported progress on a new chip structure.
According to UBP's Vey-Sern Ling: "Investors are jittery and looking for excuses to take profit on AI-related stocks", as CNBC reported.
Rayliant Global Advisors strategist Phillip Wool said the reaction appeared disproportionate to the immediate threat, because CXMT has yet to demonstrate large-scale production.
Rates and inflation data loom
Pressure on Korean equities also came from President Lee Jae Myung's comment that the country would likely need to raise interest rates soon. South Korea's benchmark rate stands at 3.00%.
Investors now look to Wednesday's U.S. consumer price index report for clues on the Federal Reserve's next move. According to Investing.com, an upside surprise in inflation could revive expectations of tighter policy.
Sources: CNBC, Investing.com
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