Asian semiconductor stocks experienced a notable decline on Wednesday, following a significant drop in Nvidia’s share price in the U.S. the previous day. Nvidia’s stock plunged more than 9% during regular trading hours on Wall Street, exacerbating concerns about the health of the U.S. economy. The decline was further compounded by Nvidia’s 2% drop in after-hours trading, triggered by news of a Department of Justice subpoena related to an antitrust investigation.
Impact on Asian Markets
The ripple effect of Nvidia’s downturn was felt across Asia’s semiconductor sector. In South Korea, major players saw substantial losses: Samsung Electronics’ shares fell by 2.6%, while SK Hynix experienced a steep drop of over 6%. SK Hynix, a key supplier of high bandwidth memory chips for Nvidia, contributed to a 2.5% decline in the Kospi index and a 3% drop in the Kosdaq index.
Japanese stocks were also affected. Tokyo Electron, a leading supplier of semiconductor manufacturing equipment, saw its shares fall by 7%, and semiconductor testing equipment firm Advantest dropped more than 8%. Additionally, SoftBank Group, which holds a stake in chip designer Arm, saw its shares decrease by 6%.
In Taiwan, Taiwan Semiconductor Manufacturing Company (TSMC), which manufactures Nvidia’s high-performance GPUs used in AI applications, fell by 4.3%. Foxconn, officially known as Hon Hai Precision Industry and a strategic partner of Nvidia, saw its shares decline by 5%.
Broader Market Effects
The U.S. sell-off led to a dramatic $279 billion wipeout in Nvidia’s market capitalization, underscoring the impact of the ongoing economic and regulatory concerns on the tech sector. This turbulence highlights the interconnected nature of global semiconductor markets and the sensitivity of these stocks to developments in major companies like Nvidia.
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