Chip stocks across Asia experienced a significant decline on Tuesday, driven by concerns over rising Chinese competition and mounting questions about the funding and longevity of the AI infrastructure boom. South Korea’s KOSPI fell nearly 10%, while Japan’s Nikkei dropped 4.4%. These markets, despite the decline, remain year-to-date leaders but have now hit multi-month lows.
AI Funding and Competition
The decline was partly triggered by a report that Nvidia was in talks to provide financing guarantees for an OpenAI data center, which raised eyebrows over the circular nature of AI build-out spending. Additionally, Europe’s chip champion, ASML, slumped 8.5% after reports that China had begun producing domestically developed immersion deep ultraviolet lithography machines, a critical technology in chipmaking that ASML has long dominated.
The stellar debut of CXMT Corp, coupled with these developments, has investors wondering if China’s semiconductor industry is transitioning from catch-up mode to becoming a genuine contender. This shift could potentially force dominant chip makers to share the AI spoils more widely. Apple’s recent move to seek U.S. assurances that CXMT wouldn’t be added to a trade blacklist further underscores the growing significance of China in the global semiconductor landscape.
Earnings reports from major tech companies like Apple, Meta, Microsoft, and Amazon later this week are expected to provide more insight into hyperscaler spending plans and the future of the AI infrastructure boom.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
