Asian Chip Stocks Tumble: SoftBank Plunges 10% Amid Nvidia Selloff & Broad Market Rout | Tech Sector Impact

Asian Chip Sector Rocked as SoftBank Plunges Amid Nvidia-Fueled Market Rout

The Asian semiconductor industry experienced a significant downturn today, with markets reacting strongly to a U.S. selloff spearheaded by artificial intelligence (AI) chip behemoth Nvidia. Japanese tech conglomerate SoftBank Group was particularly hard hit, witnessing its shares plummet more than 10% in Tokyo trading.

SoftBank's Indirect Exposure Fuels Decline

Despite SoftBank having recently divested its direct stake in Nvidia, its fortunes remain intricately linked to the broader chip market. The company maintains control over the British semiconductor design firm Arm, which provides crucial chip architecture and designs to Nvidia. Furthermore, SoftBank is a major investor in numerous AI ventures that heavily rely on Nvidia's technology, including the ambitious $500 billion Stargate project aimed at developing advanced data centers in the U.S.

Ripple Effect Across Asian Giants

The market's ripple effect extended far beyond SoftBank, impacting key players and suppliers across Asia. This occurred despite Nvidia itself reporting stronger-than-expected third-quarter earnings and issuing bullish fourth-quarter sales guidance, which analysts had initially predicted would boost the sector's outlook. However, investor sentiment appeared to favor a broad-based pullback:

• SK Hynix (South Korea): The memory chip manufacturing giant, a critical supplier of high-bandwidth memory (HBM) for Nvidia's AI accelerators, saw its stock fall by nearly 10%.
• Samsung Electronics (South Korea): A rival memory supplier to Nvidia, Samsung also recorded a decline exceeding 5%.
• Taiwan Semiconductor Manufacturing Company (TSMC, Taiwan): The world's largest contract chipmaker and primary manufacturer of Nvidia's advanced chip designs, dropped over 4% in Taipei.
• Hon Hai Precision Industry (Foxconn, Taiwan): Known for manufacturing server racks designed for intensive AI workloads, experienced a 4% dip.

Smaller Players Also Feel the Pinch

The selloff was not confined to the industry's titans. Smaller component and equipment manufacturers across Japan and Taiwan also saw their share prices weaken, underscoring the widespread pressure gripping the sector:

• Renesas Electronics (Japan): A significant Nvidia supplier, fell 2.3% in Tokyo.
• Tokyo Electron (Japan): A key provider of essential chipmaking equipment to foundries fabricating Nvidia's chips, was down 5.32%.
• Lasertec (Japan): Another Japanese chip equipment maker, experienced a decline of over 3.5%.

Nvidia's U.S. Dip Sets the Tone

This widespread retreat among Asian semiconductor firms largely mirrored Nvidia's own more than 3% drop in the U.S. market the previous day. The U.S. decline occurred despite the company's robust financial performance and optimistic guidance, suggesting that market participants might be re-evaluating valuations or engaging in profit-taking after a period of strong growth in chip stocks.