Asian chip stocks were hit by a sector-wide pullback on Friday, as a steep decline in SoftBank was triggered by a sharp drop in Nvidia’s stock overnight, despite its stronger-than-anticipated earnings and optimistic outlook.
However, SoftBank has dropped more than 10 percent in Tokyo. Recently, a Japanese tech giant sold its Nvidia shares; however, it still holds a stake in British semiconductor firm Arm, which supplies Nvidia with chip architecture and designs.
Similarly, SoftBank is also involved in a number of AI ventures that utilize Nvidia’s technology, such as the $500 billion Stargate project for data centers in the U.S.
SK Hynix of South Korea plummeted by close to 10 percent. The memory chip maker is Nvidia’s biggest supplier of high-bandwidth memory used in AI applications. Samsung Electronics, another competitor, which also provides Nvidia with memory, declined by over 5 percent.
The Taiwan Semiconductor Manufacturing Company, the largest contract chipmaker in the world, and producer of the chip designs of Nvidia, dropped over 4 percent in Taipei.
The Hon Hai Precision Industry of Taiwan, also known as Foxconn, which manufactures server racks designed for AI workloads, fell 4 percent.
It follows a sharp decline in leading Asian semiconductor players as Nvidia lost over 3 percent on Thursday in the US, even though it surpassed Wall Street expectations in its third-quarter earnings on Wednesday night.
The company also gave stronger-than-anticipated fourth-quarter sales projections, which analysts noted could have the potential to raise earnings expectations throughout the industry.
Renesas Electronics, a major Nvidia supplier, dropped 2.3 percent in Tokyo. Tokyo Electron, the supplier of the necessary chipmaking equipment to foundries that manufacture chips for Nvidia, fell 5.32 percent. Thus, another Japanese chip equipment maker, Lasertec, slumped by over 3.5 percent.
