The sell-off in global technology hardware stocks deepened on Thursday, with Asian chipmakers extending losses after Wall Street’s decline. Investor sentiment was hit by concerns over further U.S. Federal Reserve rate hikes and the cost of financing artificial intelligence infrastructure.
In South Korea, SK Hynix plunged more than 10%, while Samsung Electronics fell 7.1%. Other sector names also came under pressure, with LG Innotek down 8.1%, Seoul Semiconductor off 7.7% and Samsung SDI lower by 6.8%.
In Japan, SoftBank Group dropped 7.9%. Semiconductor testing equipment maker Advantest fell 6.9%, chipmaking equipment supplier Tokyo Electron lost 5.4%, and Renesas Electronics also declined 5.4%.
Investors are increasingly worried that higher borrowing costs could weigh on the heavy capital spending needed to build AI infrastructure. On Monday, executives at Broadcom and Intel warned that financing could become a major headwind for the AI boom, with Broadcom’s Hock Tan saying it may prove a bigger challenge than shortages of chips or electricity.
The latest declines followed a weak Wall Street session after hotter-than-expected U.S. inflation data fueled expectations that the Federal Reserve could raise rates further. The Nasdaq Composite fell 1.88% to 26,692.87, the S&P 500 dropped 1.11% to 7,718.94, and the Dow Jones Industrial Average slipped 0.09%.
Yorkville Ives tech analyst Dan Ives said U.S. Treasury yields above 5% are raising the cost of funding large AI-related projects, though underlying demand for AI computing power remains strong. In his view, the pullback may offer a buying opportunity unless clear signs of weaker demand begin to emerge.
