Asian tech stocks tumbled on Friday, following the intense selling on Wall Street the previous night. Investors' concerns about spending on artificial intelligence intensified once again, dampening market sentiment and pushing the Nasdaq Composite Index, which is dominated by tech stocks, into a correction zone.
South Korean chip manufacturers SK Hynix tumbled by over 8%, and Samsung Electronics fell by 7%. As selling pressure spread to the South Korean tech sector, LG Innotek and LG Display declined by 10% and 7.7% respectively.
During this round of selling, investors are concerned that a decisive victory for the Democratic Party in the U.S. mid-term elections could lead to stricter restrictions on data center development, which in turn may slow down the demand for AI chips and related infrastructure.
On the Japanese side, semiconductor-related stocks also declined. Advantest, a manufacturer of chip testing equipment, tumbled 12.2%, Tokyo Electron fell 7.3%, and SoftBank Group, a giant in technology investment, suffered a heavy loss of 11.6%.
Storage chip manufacturer Kioxia Holdings' stock price fell by nearly 10%, while Renesas Electronics' stock price dropped by 7.5%.
The aforementioned decline occurred shortly after a brutal night on Wall Street. Affected by growing concerns about the sustainability of the investment boom in AI and the returns on large-scale data center expenditures, the Nasdaq Composite Index fell by 5.5%, closing more than 10% below its recent highs. The Philadelphia Semiconductor Index tumbled by 12.2%.
