Asian Tech Stocks Plunge, Led by SoftBank Group and Intel, Following U.S. Losses and CHIPS Act Implications
Tech stocks in Asia experienced a downturn on Wednesday, with SoftBank Group shares plummeting by as much as 9.17%. This decline follows a second consecutive session of losses for the Japanese tech-focused investment firm, which announced a $2 billion investment in Intel. The American chipmaker’s shares soared 6.97% to close at $25.31 on Tuesday.
In addition to SoftBank Group, other Japanese tech stocks also suffered losses. Notably, semiconductor giant Advantest saw its shares drop by up to 6.27%. Renesas Electronics and Tokyo Electron were last trading 2.46% and 0.75% lower respectively.
The decline in Asian tech stocks mirrors losses in U.S. peers overnight, sparked by a dip in shares of AI pioneer Nvidia. This triggered a fall in technology companies across South Korea, Taiwan, and Hong Kong.
There is speculation that the U.S. federal government may consider taking equity stakes in semiconductor companies receiving funding under the CHIPS Act for domestic plant construction. Sources familiar with the matter shared this information with Reuters. The CHIPS and Science Act aims to bolster the U.S.’s semiconductor industry, scientific research, and innovation.
Taiwanese chip company TSMC and manufacturer Hon Hai Precision Industry, known globally as Foxconn, both saw their shares decline by 1.69% and 2.16% respectively. TSMC manufactures high-performance graphics processing units for Nvidia, while Foxconn has a strategic partnership with Nvidia to build “AI factories.”
South Korean tech stocks generally witnessed a decline, with shares of chipmaker SK Hynix dropping by 3.33%. Samsung Electronics, however, experienced a marginal rise of 0.75%.
TSMC, Samsung, and SK Hynix are among the companies that have received funding under the CHIPS Act.
In Hong Kong, the Hang Seng Tech index dropped by 0.87% in early trade. The worst performers on the index were Kuaishou Technology, JD Health International, and Horizon Robotics, which declined by 4.8%, 3.31%, and 2.29% respectively.
Significant losses were also observed in tech heavyweights Alibaba Group and Xiaomi Corp, which fell by 1.44% and 1.34% respectively.