On Friday, Japanese tech stocks experienced a sharp downturn as the fallout from a sell-off in U.S. semiconductor shares spread to Asia. SoftBank's shares fell by 8.8%, while Tokyo Electron and Advantest saw declines of 9% and 9.4%, respectively.
The downturn was exacerbated by Kioxia's 14% plunge following a Texas jury's ruling that the company must pay $229 million for patent infringement related to computer memory technology.
The broader context includes a 1.47% drop in the Nasdaq Composite and a nearly 4% decline in the VanEck Semiconductor ETF, with notable losses from companies like Arm Holdings, Micron Technology, Advanced Micro Devices, and Broadcom, each losing over 5%.
Despite TSMC raising its full-year capital expenditure forecast to between $60 billion and $64 billion, investor sentiment remained focused on the potential unsustainability of the industry's aggressive investment cycle. Andrew Jackson, a strategist at Ortus Advisors, noted that the sell-off reflects an unwinding of crowded AI momentum trades rather than a fundamental deterioration in the sector.
This trend marks a significant reversal for AI-related shares, as investors begin to question whether high valuations can be maintained amid escalating spending on AI infrastructure