Shares slumped Thursday in Japan and South Korea in the latest spate of heavy selling of computer chip stocks, while U.S. futures edged lower after modest losses on Wall Street.

Market Performance

South Korea’s benchmark Kospi index sank 7.9% to 7,648.09. with chip-related shares trading lower. Memory chipmaker SK Hynix lost 14.6% and Samsung Electronics tumbled 9.1%. Tokyo’s Nikkei 225 lost 2.5% to 68,733.15. Shares of chip equipment maker Tokyo Electron shed 7.4%.

Taiwan’s Taiex declined 0.6% as chipmaking giant TSMC, or Taiwan Semiconductor Manufacturing Co., fell 1.6%. Hong Kong’s Hang Seng was up 0.7% to 23,034.34. Chinese electric vehicle maker BYD’s shares rose 7.9% after it reported its sales rose for a second straight month. The Shanghai Composite index fell 1.6% to 4,046.76.

Australia’s S&P/ASX 200 edged less than 0.1% higher to 8,724.50. India’s Sensex climbed 0.5%. Surging demand for artificial intelligence has pushed many AI and tech stocks higher in recent months, with markets in South Korea, Japan and Taiwan reaping big gains.

Economic Concerns

However, concerns over a potential glut in supply given the massive investments made by Big Tech companies in the U.S. and elsewhere have been clouding investor sentiment. On Wednesday, chip stocks in the U.S. mostly fell. Micron Technology gave up 10.6%, Intel sank 9%, AMD, or Advanced Micro Devices, dropped 6.9%, Broadcom lost 2.2% and Nvidia slipped 1.3%.

“AI demand may continue to grow but at a slower pace than expected,” economists Megan Fisher and Vicky Redwood at Capital Economics wrote in a note on Thursday. “Firms and investors may be underestimating the barriers to AI adoption.”

Original reporting: KTBS 3 (Shreveport) — read the source article.