On Wednesday, Asian technology stocks continued their downward trend, primarily driven by semiconductor companies. SK Hynix fell more than 10% after it reported record quarterly profits and revenue but still missed analysts' expectations. Other notable declines included Samsung Electronics, which dropped over 4%, and LG Innotek, which fell 9%.
Kieron Poon, an investment director at Aberdeen Investments, attributed the weakness to ongoing deleveraging in Korea and a general decline in sentiment towards global tech stocks, although he maintained a long-term positive outlook. Japanese chip manufacturers also faced losses, with Kioxia down 10% and Tokyo Electron falling 8.5%.
Taiwan's TSMC, the largest contract chip manufacturer, saw a 1.32% decrease. The declines in Asia followed a weak session for U.S. semiconductor stocks, where Nvidia, Intel, and AMD all experienced significant losses. Despite the sharp pullback, Poon views this as an opportunity to invest in high-quality businesses at more attractive valuations.
David Riedel from Riedel Research Group noted that the recent sell-off in AI-related chip stocks is a correction after a period of rapid gains, suggesting that while there are concerns regarding AI financing and competition from China, the overall market remains healthy.
In contrast, Chinese internet stocks like Tencent and Meituan saw gains, indicating some resilience in that sector amidst the broader market decline