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. The Japanese memory chipmaker plunged more than 14% after a federal jury in Texas ruled on Thursday that it infringed a patent held by satellite and networking company Viasat, relating to how computers store and access data. The jury ordered Kioxia to pay $229 million in damages.
The losses did not stop there. In the United States on Thursday, Micron Technology, Advanced Micro Devices and Broadcom each fell more than 5%. Arm Holdings, the British chip designer whose technology sits inside most smartphones, dropped more than 5%. U.S.-listed shares of South Korean memory chipmaker SK Hynix slumped more than 13%.
TSMC's numbers were actually good. The company posted a sharp jump in profit and raised its full-year spending plan to $60 billion to $64 billion. Investors were not impressed. Many read the bigger spending figure as a warning sign, not a vote of confidence.
Are investors losing faith in the AI build-out?
Not exactly, but they are asking harder questions. Andrew Jackson, a strategist at Ortus Advisors, told CNBC Tech that 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 the data centres and chip capacity that AI needs. At some point, investors want to see those investments turn into profits. Right now, the numbers are large and the payoff feels distant.
For ordinary savers with pension funds or index funds, the practical message is calm but worth noting. Tech stocks have had a strong run, and sharp pullbacks like this one are a normal part of that cycle. Nothing in Friday's moves suggests the underlying technology has stopped working. It means markets are recalibrating how much they are willing to pay for the promise of future AI profits.
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 and Alibaba each easing roughly 1%.
