Triggered by mounting industry fears, the global chip sector saw more than $500 billion in value erased.
A global selloff in semiconductor stocks erased about 500 billion dollars in market value as concerns mounted over stretched valuations and the durability of the artificial intelligence rally. The slump began in the United States on Tuesday and deepened across Asia on Wednesday, hitting major chipmakers and equipment suppliers.
South Korea’s Kospi index plunged as much as 6.2 percent, dragged down by memory giants Samsung Electronics and SK Hynix. Japan’s Advantest fell 10 percent, pressuring the Nikkei 225, while Taiwan Semiconductor Manufacturing Company slipped 3.3 percent. The declines followed a sharp drop in the Philadelphia Semiconductor Index the previous day, reflecting broad investor anxiety.
The selloff highlights growing unease about whether chipmakers can deliver earnings that justify their rapid rise this year. Semiconductor stocks have added trillions in value since April as investors bet on soaring demand for AI computing power, but renewed fears of elevated interest rates and slower policy easing from the Federal Reserve have tempered enthusiasm.
Cautious commentary from Wall Street leaders and worries about an overdue correction added to the pressure. The slide accelerated after Palantir issued a forecast that disappointed investors, while a muted reaction to results from Advanced Micro Devices amplified weakness in Asia trading. Hedge fund manager Michael Burry’s bearish positions on Nvidia and Palantir also weighed on sentiment.
“It is a sea of red across broad markets,” said Chris Weston, head of research at Pepperstone Group. “We need to remain open minded to the possibility that this could still build.”
