CoreWeave debt fears drag Asian AI chip stocks lower

Asia's AI hardware stocks lost ground last week after a deepening selloff in US technology shares raised a new concern. Investors are now asking less about demand for AI chips and more about whether data centre builders can keep borrowing to pay for them. A Goldman Sachs The Goldman Sachs Group, Inc. ↗ 1.03% basket of regional AI hardware stocks fell 11% last week, its steepest drop since mid-July, according to Bloomberg reporting carried by The Straits Times.en.sedaily.com

Some of the region's biggest winners this year fell the hardest. Nan Ya Plastics, a maker of circuit board materials and the best performer on the MSCI Asia-Pacific Index in 2026, slid 12% from a record high. Unimicron Technology fell 14% in a week, and Samsung Electro-Mechanics dropped 23%.en.sedaily.com

CoreWeave's debt at the center

The selloff centers on CoreWeave ↗ 1.65%. Its bonds fell last week to levels that signal distress, and its shares lost 25% over the week, including a 12% drop on Oct. 16. The cost of insuring CoreWeave's debt against default, measured by credit default swaps, rose from about 900 basis points to more than 1,200, Seoul Economic Daily reported. The Nasdaq Composite fell 4.5% for the week, its worst showing since June.en.sedaily.com+1

"Financing costs are like gravity for the AI boom," said Jian Shi Cortesi of GAM Investment Management, warning that even delayed projects could reset expectations for Asian suppliers' earnings. TSMC Taiwan Semiconductor Manufacturing Company Limited ↗ 1.16%, Samsung Electronics and SK Hynix ↘ 2.16% together make up nearly a third of the MSCI Asia ex-Japan Index.straitstimes.com

Monday's choppy open

Asian markets opened lower on Monday, Oct. 19. South Korea's Kospi fell 3.2% at the open before foreign buyers cut the loss roughly in half, Aju Press reported. Samsung Electronics and SK Hynix had each been down about 6% in premarket trading, and both trimmed their losses after the open. In Tokyo, the Nikkei 225 was pulled down by SoftBank Group, Advantest and Tokyo Electron.kuwaittimes.com+3

Later in the session, regional markets steadied. Nasdaq 100 futures rebounded, and the Kospi turned higher, while Murata Manufacturing and TDK fell.finance.yahoo.com

Fundamentals versus funding

Strong company results have not stopped the selling. Earlier, TSMC reported a 69% jump in third-quarter net profit. Kiwoom Securities analyst Han Ji-young said investors will watch closely this week to see whether CoreWeave recovers and whether corporate bond yields and credit default swap prices calm down.theedgemalaysia.com+1

Some fund managers are not worried. "We are not worried about the ongoing chip sell-off," said Kunjal Gala of Federated Hermes, pointing to strong AI demand.straitstimes.com