AI Jitters Hit Asian Tech Stocks as Korean Chipmakers Lead Regional Declines

Asian equities fell broadly on Tuesday, with South Korea’s chipmakers leading the region’s losses as renewed doubts emerged over the financing and profitability of artificial intelligence (AI) ahead of major technology earnings. According to Yahoo Finance, the MSCI Asia Pacific Index declined 0.8% as most regional benchmarks ended lower.

Korean Chipmakers and AI-Related Losses

South Korea's KOSPI dropped 2.5%, the steepest fall among major Asian markets. Memory chipmaker SK Hynix tumbled 3.5%, approaching its lowest close since April. Samsung Electronics slipped 1.8%. In Japan, Kioxia lost 1.6%, TDK fell 1.5%, and Murata Manufacturing dropped 0.7%. Taiwan Semiconductor Manufacturing Co. slipped 0.4% and Largan Precision was down 0.7%. LG Innotek declined 2.4%, while Foxconn rose 1.1%.

The selloff in Asian chip stocks came in contrast to a rebound in U.S. semiconductor shares on Monday. The Philadelphia Semiconductor Index gained 1.6%, snapping an eight-session losing streak—its longest since 2008. The Nasdaq 100 rose 1.2%, and the S&P 500 advanced 0.4% overnight. In Asian trading, Nasdaq 100 futures rose 0.1% and S&P 500 futures gained 0.2%.

IPO Setback and Market Sentiment

Investor sentiment was further dented by the market debut of South Korean AI data-center infrastructure firm Elice Group. Shares opened 16% below the initial public offering price and subsequently fell as much as 33%. According to Yahoo Finance, this high-profile listing disappointed, adding to broader skepticism about the AI trade in Asia.

China’s Policy Steady, Other Asia Moves

China’s major lending rates were left unchanged for a 17th consecutive month, with the People’s Bank of China maintaining the one-year loan prime rate at 3.00% and the five-year rate at 3.50%. The decision followed stronger-than-expected third-quarter GDP data, which reduced urgency for new monetary easing. Separately, the central bank is considering replacing its seven-day reverse repo rate with the overnight rate to improve policy transmission.

Markets elsewhere in the region also declined. Hong Kong’s Hang Seng dropped 1%, China’s CSI 300 slipped 0.3%, and the Shanghai Composite was little changed. Australia’s S&P/ASX 200 fell 0.8%, pressured by National Australia Bank shares slumping around 3%. New Zealand’s NZX 50 and Singapore’s Straits Times Index each lost 0.4%. India’s Nifty 50 futures declined 1%. Indonesia's Jakarta Composite rebounded 2.3% after plunging more than 11% last week, its steepest one-day loss since January 1998, following an MSCI warning about its emerging-market status.

Tech Earnings and Global Concerns Ahead

This week brings key U.S. technology earnings, with Netflix reporting later on Tuesday, followed by Meta Platforms, Tesla, and IBM on Wednesday. SpaceX is also due to report, in addition to Lam Research, Texas Instruments, Procter & Gamble, General Motors, and GE Aerospace. According to Yahoo Finance, investors are focused on Meta’s results, particularly its AI infrastructure capital spending plans.

Recent comments from Federal Reserve Chair Kevin Warsh indicated no urgency to further raise rates, though he did not signal if or when further increases might occur. Meanwhile, oil prices resumed their rise as markets weighed Middle East risks and the U.S. administration's temporary waivers on Russian energy sanctions, pending further review.