Asian tech stocks selloff hits SoftBank, SK Hynix and chip shares

The Asian tech stocks selloff deepened Wednesday as investors cut exposure to chip and AI-linked names after another weak session for U.S. semiconductor shares. The move matters for retail investors because the same AI trade that lifted many global technology stocks is now showing how quickly sentiment can move across markets.

South Korea took some of the heaviest pressure. SK Hynix dropped more than 10% after the memory-chip maker reported record quarterly profit and revenue but still fell short of analysts’ estimates, according to CNBC. Samsung Electronics declined more than 4%, LG Innotek fell 9%, and Seoul Semiconductor lost more than 6%.

Kieron Poon, investment director of Asian equities at Aberdeen Investments, said in a Tuesday note cited by CNBC that the pressure in Asian chip shares reflected “the ongoing deleveraging process in Korea and softer sentiment towards global technology stocks.” Deleveraging means investors are reducing borrowed exposure or cutting risk, which can accelerate selling when a popular trade starts to reverse.

Poon added that the recent swings “has not changed our long-term positive view,” according to CNBC.

Why are Asian tech stocks falling today?

The selling followed weakness in U.S. semiconductor stocks overnight, CNBC reported. Nvidia fell at the open but ended the session flat, while Intel dropped nearly 6% and AMD lost 8%.

Memory and storage names were hit harder in the U.S. Micron and Seagate each lost more than 8%, Western Digital fell nearly 7%, and Sandisk dropped 14%, according to CNBC. U.S.-listed shares of SK Hynix declined 9%.

That matters because semiconductor stocks are closely tied across regions. A pullback in U.S. chipmakers can spill into Asia when investors reassess demand for memory, AI chips, chipmaking equipment and other parts of the supply chain.

SoftBank and Japan chip names join the decline

Japan’s semiconductor-linked stocks also sold off. Kioxia, a computer-memory company, fell 10%, while Tokyo Electron dropped 8.5%, according to CNBC.

SoftBank Group lost more than 7%. CNBC described SoftBank as a major AI investment proxy because of its stake in Arm, the chip-design company. A proxy stock is one investors use as a stand-in for a bigger theme, in this case artificial intelligence.

The weakness was not limited to Japan and South Korea. Mainland China’s tech-heavy ChiNext 300 index fell 1.83%, while the Hang Seng China Semiconductor Chips Index lost more than 5%, CNBC reported. Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip manufacturer, was down 1.32%.

Aberdeen’s Poon said the pullback had made valuations more appealing for selected companies. “The recent market pullback has brought valuations to more attractive levels, creating opportunities for us to add exposure to high quality businesses at more reasonable prices,” he said, according to CNBC.

For everyday investors, the takeaway is that AI and semiconductor exposure can cut both ways. Strong earnings or long-term demand expectations may not protect a stock if results miss forecasts or if investors decide the broader trade has become too crowded.

This story draws on original reporting from CNBC.