Asian semiconductor stocks tumbled as a selloff in U.S. chipmakers spilled into the region, eventually spreading to European and U.S. markets on Friday. Asia-Pacific equities mostly declined, weighing heavily on chip-heavy South Korea, while emerging-market equities slumped as a key gauge headed for a technical correction.
The decline was fueled by mounting concerns over whether massive artificial-intelligence investments will justify lofty valuations and questions regarding the longevity of AI enthusiasm. Taiwan Semiconductor Manufacturing Co. further stoked these worries, as its results and outlook failed to reassure investors, raising concerns over heavy spending and weaker profitability.
In Taiwan, stocks fell into a technical correction amid broad losses in the chip sector, and Japanese AI-linked stocks tumbled as the U.S. semiconductor rout spread across Asia. Additionally, investor sentiment on China technology hardware flashed its most bearish reading in over four years as the red-hot rally in chip stocks rapidly cooled.