SoftBank sinks as Asia tech stocks tumble, tracking Wall Street tech losses
A silicon wafer with chips etched into it is seen as U.S. Vice President Kamala Harris tours the site where Applied Materials plans to build a research facility in Sunnyvale, California, U.S., May 22, 2023.
Pool | Reuters
Asian semiconductor and technology stocks continued their decline on Wednesday, tracking overnight losses on Wall Street after chipmakers lost ground amid ongoing concerns about strained valuations related to artificial intelligence.
of japan Softbank Group It fell 10 percent amid a broader decline in tech names and efforts to raise at least $6 billion through a margin loan backed by OpenAI shares have stalled. Bloomberg News. The Japanese tech investment giant is exploring alternative financing options but may reconsider the loan at a later date.
Japanese chip equipment manufacturers cutting edge And Renesas Electronics fell 3.8% and 3.4% respectively.
In South Korea, memory chip giant SK Hynix fell over 8%, while Samsung Electronics fell 7.45%. Battery maker Samsung SDI fell more than 5%, while display panel maker LG Display lost nearly 9%.
Taiwan’s chip industry was also under pressure. Taiwan Semiconductor Manufacturing Company., the world’s largest contract chipmaker, fell nearly 2%, while Apple supplier Hon Hai Precision Industry It lost over 4 percent.
The declines followed a weak session on Wall Street, where the tech-heavy Nasdaq Composite fell 0.97% and the S&P 500 fell 0.26%. A rally in semiconductor stocks that helped fuel gains a day earlier faded quickly, with the iShares Semiconductor ETF falling 1%.
AI-related fundraising appears to be moving money away from existing tech stocks. Upcoming listings such as SpaceX, Anthropic and OpenAI could absorb investor capital that previously flowed into publicly traded tech companies and potentially weigh on the sector.
OpenAI confidentially filed for an initial public offering on Monday, fueling excitement around AI-related investments. SpaceX, meanwhile, is scheduled to begin trading on Friday following what is expected to be the largest IPO in history. While some investors see the listing as another catalyst for the AI rally, others worry that the $1.75 trillion valuation could signal overheating in the sector.
Andrew Jackson, equity strategist at Ortus Advisors, said recent swings in technology stocks could cause investors to turn to defense companies, especially in Japan, where the government is expected to strengthen its focus on military readiness.
Jackson, defense contractors Mitsubishi Heavy Industries, Kawasaki Heavy Industries, IHI Corp. “With retail punters gnashing their teeth and looking for something new to bet on, heavy tanks may be returning to focus after their recent retreat,” he said, noting Japan Steel Works and Japan Steel Works as potential beneficiaries.
