Stories
Global Chip Stocks Plunge Amid Rising Interest Rate Fears and AI Funding Worries
- •Global technology hardware stocks experienced a deep rout as Asian chipmakers followed US peers lower due to Federal Reserve rate hike fears and AI funding difficulties.
- •Top memory makers Samsung Electronics and SK Hynix slid over 6 percent each, dragging South Korea's Kospi benchmark down by up to 6.5 percent.
- •Japan's Nikkei 225 dropped more than 3 percent with major semiconductor-related shares leading the losses.
- •A US gauge of semiconductor stocks erased $1.6 trillion in market value over a six-day losing streak driven by concerns over stretched valuations and costly AI infrastructure.
- •Investors remain cautious and await further clarity on US interest rates and upcoming earnings reports from major industry players like TSMC.
Key Questions Answered
Global technology hardware stocks fell as Asian and US chipmakers reacted to worries over Federal Reserve interest rate hikes and ongoing AI funding difficulties. Data showing that US consumer prices advanced at the fastest clip in five months fueled aggressive tightening bets, while distress signals from companies like CoreWeave raised fresh questions about the sustainability of massive AI infrastructure spending.
Top memory makers Samsung Electronics and SK Hynix each slid more than 6%, dragging South Korea's Kospi down by as much as 6.5% to its lowest level since July. Japan's Nikkei 225 dropped over 3%, with semiconductor shares like Ibiden and Kioxia ranking among the worst performers.
Investors are closely watching upcoming earnings reports from Taiwan Semiconductor Manufacturing Co. (TSMC), which are due later on Thursday. Although Taiwanese tech stocks have held up better than their Korean peers recently, the market remains concerned about the long-term cycle of memory chips following substantial gains earlier in the year.
