Asia chip stocks tumble as AI spending fears sweep global markets
SoftBank fell nearly 9% and Japan's top chip equipment makers lost similar ground on Friday, as Wall Street's semiconductor sell-off rippled across Asia and investors asked a pointed question: is the AI building boom worth the cost?
Key points
- SoftBank shares fell 8.8% on Friday, 8 August 2025, tracking overnight losses on Wall Street.
- Japanese memory chipmaker Kioxia plunged more than 14% after a Texas federal jury ordered it to pay $229 million in damages for infringing a Viasat patent on computer memory technology.
- Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, fell 3.64% despite reporting a sharp jump in quarterly profit.
- The VanEck Semiconductor ETF, a fund that tracks the biggest chip companies, fell almost 4% on Thursday in the United States.
- TSMC raised its full-year capital spending forecast to between $60 billion and $64 billion, up from an earlier estimate of $52 billion to $56 billion.
Friday was an ugly day for technology stocks across Asia. SoftBank, the Japanese investment giant that has placed enormous bets on artificial intelligence companies, dropped 8.8%. Tokyo Electron, which makes the equipment used to manufacture chips, lost 9%. Advantest, another chip equipment firm, slid 9.4%.
Kioxia had it worst. Plunging more than 14%, the Japanese memory chipmaker was hit after a federal jury in Texas ruled Thursday that it infringed a patent held by satellite and networking company Viasat, relating to how computers store and access data. The jury's award: $229 million.
The losses didn't stop there. In the United States on Thursday, Micron Technology, Broadcom, Advanced Micro Devices and Arm Holdings each fell more than 5%. Arm, the British chip designer whose technology sits inside most smartphones, was one of the harder hits. U.S.-listed shares of South Korean memory chipmaker SK Hynix slumped more than 13%, though South Korea's domestic market was closed for a public holiday.
TSMC's numbers were actually good. The company beat market expectations and lifted its full-year spending plan from $52 billion to $56 billion up to $60 billion to $64 billion. Investors weren't impressed. Many read the bigger spending figure as a warning, not a vote of confidence.
Are investors losing faith in the AI build-out?
Not exactly, but they're asking harder questions. Andrew Jackson, a strategist at Ortus Advisors, told CNBC Tech the sell-off looked more like investors unwinding crowded bets than a judgment that AI is finished as a business. A crowded trade is one where too many investors have piled into the same stocks; when sentiment shifts, they all try to exit at once, which pushes prices down fast.
The core worry is straightforward. Companies have been spending at a breathtaking pace to build data centres and chip capacity that AI needs. Investors want to see those investments turn into profits. Right now the numbers are large and the payoff feels distant. Our 15 July story found that chip executives were already fielding harder questions about return on investment even while claiming demand was nearly unlimited.
For ordinary savers with pension or index funds, sharp pullbacks like this are a normal part of any strong-run cycle. Nothing in Friday's moves suggests the underlying technology has stopped working. Markets are recalibrating how much they'll pay for the promise of future AI profits, and that repricing could continue before it resolves.
Chinese tech stocks also weakened. Hong Kong-listed shares of Tencent fell 1.3%, Meituan dropped 2.4% and Kuaishou lost 3.3%, with Baidu easing 0.7% and Alibaba 1.3%.
