Asian chip stocks slide as US semiconductor selloff spreads

Japanese and South Korean stock markets fell sharply on Thursday, August 6, as a broad retreat in US semiconductor stocks rippled across Asia, dragging down chip leaders and reversing gains from the prior session's rally.

Regional Indexes Slide

The Kospi opened 1.81% lower and later extended its decline to around 2%, while Japan's Nikkei 225 dropped as much as 1.43% in early trading. The declines came after a mixed close on Wall Street, where the Dow Jones Industrial Average rose 0.49% but the Nasdaq Composite fell 0.83% as technology and growth stocks came under broad pressure.asiae+2

Bloomberg reported ahead of the open that equity-index futures for Australia, Japan, and South Korea all edged lower, while a gauge of chipmakers fell 1.4%.bloomberg

Chip Stocks Bear the Brunt

South Korea's semiconductor sector led regional losses. SK Hynix ↘ 3.12% fell more than 5%, while Samsung Electronics slid roughly 2%. In Japan, Kioxia plunged nearly 10%, and SoftBank Group dropped about 4%.kucoin+1

The selling followed a session in which Asian chip stocks had rallied, making them particularly vulnerable to profit-taking. As Asia Business Daily noted, the Kospi had surged over 4% in the prior session on optimism surrounding Strait of Hormuz normalization and strong earnings from US tech companies, triggering an intraday buy-sidecar.asiae

US Earnings Trigger the Reversal

The catalyst for the pullback was a wave of selling in US semiconductor names. Advanced Micro Devices ↘ 1.47% closed 7% lower on Wednesday despite posting strong second-quarter earnings and guiding for data center segment growth, according to CNBC. The Philadelphia Semiconductor Index weakened broadly, with Western Digital ↗ 1.96% and Qualcomm ↘ 0.52% also declining.cnbc+1

SpaceX shares tumbled about 14% despite strong results as roughly $101 billion in shares became eligible for trading.bloomberg

Han Ji-young, a research analyst at Kiwoom Securities, characterized the current environment as "a normalization phase following abnormal volatility," advising investors to maintain positions or accumulate shares in sectors with strong earnings momentum rather than selling into rebounds.asiae