Asian chip stocks slide as tech selling extends into new week

Asian equity markets traded mixed on Monday as selling in semiconductor and technology shares dragged benchmarks in Tokyo and Seoul lower, even as broader regional sentiment held up on expectations for a strong U.S. earnings season.

Tech Pullback Extends Into New Week

Japan's Nikkei 225 fell 0.3% to 69,568.27, with SoftBank Group declining 3.3% and chipmaker Tokyo Electron shedding 1%. South Korea's Kospi dipped 0.7% to 8,033.16, extending losses after a volatile stretch that saw the index plunge more than 6% the previous Thursday amid a global tech rout.beincrypto+1

The selling came as investors continued to rotate out of richly valued AI and semiconductor stocks that powered much of the first half of 2026. Tech stocks surged more than 80% in the first six months of the year, according to Yahoo Finance, leaving many fund managers inclined to lock in profits. The MSCI Emerging Markets index returned 26.8% in the first half, more than double the S&P 500's 10% gain, with technology and Asia-focused sectors leading the way.trustnet+1

Chip Sector Remains Under Pressure

The pullback follows a punishing stretch for regional chipmakers. Samsung Electronics and SK Hynix both suffered steep losses last week, falling 9% and nearly 15% respectively on July 2 after the Nasdaq Composite slumped overnight. The Philadelphia Semiconductor Index lost nearly 11% in back-to-back sessions during the selloff.youtube+1

Attention is now turning to upcoming earnings from major chipmakers. SK Hynix is also preparing for what is expected to be a blockbuster U.S. listing on the Nasdaq ↗ 0.76%, with ADRs set to begin trading around July 10. The company recently overtook Samsung to become South Korea's most valuable firm, with a market capitalization exceeding 2,080 trillion won.reuters+1

Mixed Signals Across the Region

Not all Asian markets declined. Hong Kong's Hang Seng gained 0.8% to 23,540.58, while the Shanghai Composite edged down less than 0.1%. U.S. futures pointed higher on Monday, buoyed by easing oil prices after OPEC+ announced a fifth consecutive monthly output increase.ksat+1

Reuters reported that markets scaled back expectations of a near-term Federal Reserve rate hike following a softer U.S. payrolls report, with futures implying a 78% chance of a steady outcome at the July 29 meeting. That offered some comfort to investors navigating a semiconductor sector caught between strong AI demand and questions about whether valuations had run ahead of fundamentals.reuters