Asia’s AI Chip Stocks Fell Nearly 10% as KOSPI Lost 5.7%

Tech shares slumped in Asia on Friday on “worries that huge and rising AI spending may not deliver sufficient returns”, Reuters reported. On Yahoo Finance data, Kioxia, Advantest and SK Hynix were each down nearly 10% at their worst, and South Korea’s KOSPI was down 5.7% at 01:50 UTC.

By about 04:45 UTC the losses had narrowed: the KOSPI was down 3.0%, about half its worst fall, and SK Hynix was down 5.5%. By our arithmetic, SK Hynix and Tokyo’s AI names were still down about twice as much as their home index, while Samsung and TSMC were down less.

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What Set It Off

Reuters tied the move to US results. Alphabet shares fell 12.6% on Wall Street, it said, and “an aftermarket plunge of 23% in Intel shares and a drop of 7% in Amazon stocks, as they too burn through cash, drove Nasdaq 100 futures down 1.4% and sent stocks of chipmakers around Asia into a tailspin.” Our after-hours scoreboard has the moves for the ten companies that reported on 29 October.

“The market isn’t necessarily questioning whether the AI buildout can be financed,” Pepperstone analyst Chris Weston said, according to Reuters. “It’s increasingly questioning whether shareholders will earn an adequate return on the enormous capital being deployed.”

Amazon’s cash is part of that question. Our read of its quarter found third-quarter capex ran 1.8 times operating cash flow. Our Google piece unpacks Alphabet’s drop, and our Intel piece covers the results behind its fall.

What Was Posted on X

US futures context: at 01:38 UTC on 30 Oct, @StockSavvyShay posted that “Nasdaq futures are absolutely tanking right now”. The post gives no level; the Reuters futures figure quoted above is the one this piece uses.

Seoul: SK Hynix Down Almost Twice the Index

The KOSPI closed 29 October at 5,937.66 and traded as low as 5,599.42 at 01:50 UTC on Friday, down 5.7%, on Yahoo Finance data. At 04:42 UTC it was down 3.0%. Reuters put the KOSPI’s fall at 5% and said that left it down more than 17% for October.

SK Hynix was down 9.5% at its low and 5.5% at 04:42 UTC. By our arithmetic, that is about 1.8 times the KOSPI’s fall at the same time. Samsung Electronics was down 6.7% at its low but only 2.6% at 04:42 UTC, less than the index. Two days earlier, SK Hynix jumped 11% as the KOSPI closed above 6,000.

Tokyo: Chip Equipment Led the Nikkei Lower

The Nikkei dropped as much as 3%, “led by chip-related stocks”, Reuters reported. Advantest and Tokyo Electron fell 9.1% and 5.6% respectively at the time of its report, and other chip and AI losers included Ibiden, down 15.2%, Lasertec, down 13.8%, and SoftBank Group, down 6.7%, Reuters said.

Reuters said the broader Topix was down a milder 1.3% while the Nikkei was down 2.8%. By our arithmetic, the Nikkei’s fall was about twice the Topix’s at that point, a gap that reflects how much the chip names weigh in the Nikkei.

On Yahoo Finance data at 04:47 UTC, the Nikkei was down 2.2%, Advantest 5.9%, Kioxia 5.7%, SoftBank Group 5.8% and Tokyo Electron 4.9%. By our arithmetic, those four were down between 2.2 and 2.7 times the index. “This can be seen as a sign of growing concerns regarding the profitability of AI investments, which is weighing on share prices,” Nomura Securities equities strategist Maki Sawada said, according to Reuters.

Taipei: TSMC Held Up Better Than Its Market

Taiwan’s TAIEX was down 4.9% at its low at 01:15 UTC and 3.4% at 04:42 UTC, on Yahoo Finance data. Bloomberg headlined its report “Taiwan Stocks Heads for Correction as Global AI Selloff Deepens”. TSMC was down only 1.7% at 04:42 UTC, about half the index’s fall by our arithmetic.

Our packaging bottleneck piece covers the ABF substrate lead times behind the AI chip supply chain.

Bonds Rallied

Benchmark 10-year US Treasury yields fell by more than 7 basis points in Tokyo trade to 4.91%, Reuters said, for a fall of some 37 basis points through October, “the largest one-month drop since December 2023”. Two-year yields dropped by more than 8 basis points to 4.57%, it said.

In China, the CSI300 “headed for its largest monthly fall in a decade”, Reuters said. The Bank of Japan left rates on hold, as expected, it reported. The Financial Times headlined its markets report “Global tech rout deepens as US earnings stoke AI spending fears”.

The Structural Read

As we read the session, the steepest falls came among chip suppliers, with Ibiden down 15.2% and Lasertec down 13.8% per Reuters, while the largest chipmakers fell less: TSMC was down 1.7% at 04:42 UTC, about half the TAIEX’s fall by our arithmetic, and Samsung Electronics 2.6%, less than the KOSPI.

Reuters linked the slump to cash burn at US buyers: it said Intel’s aftermarket plunge and Amazon’s drop, as they too burn through cash, sent chipmakers around Asia into a tailspin.

The bond market moved the other way: Reuters said 10-year Treasury yields fell to 4.91%, for a fall of some 37 basis points through October.

Three Implications

FOR AI SUPPLIERS SK Hynix, Advantest, Kioxia and Tokyo Electron were down between 1.8 and 2.7 times their home index at the latest reads, by our arithmetic from Yahoo Finance data.

FOR THE BIGGEST CHIPMAKERS Samsung Electronics and TSMC were down less than their markets at the latest reads, on Yahoo Finance data.

FOR THE US BUYERS Reuters tied the move to Alphabet’s 12.6% fall and the aftermarket drops in Intel and Amazon, which it said burn through cash.

What Is Not Established

These are intraday moves, not closing prices: Tokyo and Seoul trade until 06:30 UTC. Yahoo Finance quotes are delayed, and Reuters’ figures were taken at earlier points in the session, which is why they differ from ours. The ratios against each index are our arithmetic from Yahoo Finance data; they compare price moves and do not measure each stock’s weight in its index. Our 20 October piece covers an earlier KOSPI drop.

The Bottom Line

Asia’s AI chip names took the first hit from the US results: Kioxia, Advantest and SK Hynix were each down nearly 10% at their worst, and the KOSPI was down 5.7%. By about 04:45 UTC the falls had narrowed, but SK Hynix and Tokyo’s AI names were still down about twice their index, by our arithmetic.