Asian stock markets saw significant declines on Tuesday, led by a sharp drop in tech and semiconductor shares following reports of new competition in China.
Key facts
- •South Korea's KOSPI index dropped 10.2 percent, triggering a 20-minute circuit-breaker.
- •Shanghai Yuliangsheng reportedly started mass production of chip technology previously dominated by ASML.
- •Tokyo's Nikkei index fell more than 4 percent, with Kioxia shares down 18 percent.
- •The Philadelphia Semiconductor Index dropped 2.2 percent on Wall Street prior to the Asian market session.
- •Brent crude oil prices lost more than 8 percent on Monday amid hopes for a deal to reopen the Strait of Hormuz.
Asian stock markets experienced a widespread sell-off on Tuesday, with South Korea's KOSPI index falling 10.2 percent. The decline was driven by a sharp drop in semiconductor stocks following a report that China's Shanghai Yuliangsheng has begun mass production of technology previously dominated by the Dutch firm ASML. This rout follows a global downturn in the tech sector and concerns regarding the sustainability of the artificial intelligence investment boom.
By the numbers
Regional Market Impact
In South Korea, major firms SK hynix and Samsung both saw their share prices fall by approximately 13 percent. The KOSPI index was temporarily halted by a 20-minute circuit-breaker during the session. Both companies have declined nearly 50 percent since reaching record highs last month, while the broader KOSPI index has dropped more than 30 percent. Elsewhere, Tokyo's Nikkei index fell more than 4 percent, with Kioxia shares dropping 18 percent and Advantest and Tokyo Electron both falling 11 percent. Taipei's market also declined by more than 3 percent, impacted by losses at TSMC.
AI Sector and Market Sentiment
The recent market volatility follows a period of intense investment in artificial intelligence, which has faced growing scrutiny over the timing of financial returns and extended valuations. Stephen Innes of SPI Asset Management noted that while demand for high-bandwidth memory remains strong, market sentiment has shifted regarding the willingness to pay high prices for tech equities. Investors are currently awaiting upcoming earnings reports from major industry players, including SK hynix, Samsung, Kioxia, Microsoft, Meta, Apple, and Amazon.
Geopolitical Developments
The tech sell-off overshadowed recent developments regarding the conflict between the United States and Iran. Both nations have paused retaliatory strikes for three days, and Donald Trump indicated there is a potential for a diplomatic deal. Additionally, reports suggest that Oman and Iran are working toward an agreement to resume shipping through the Strait of Hormuz, which has contributed to a decline in oil prices.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Channel NewsAsia.
