Asian artificial intelligence hardware suppliers face weaker demand and profits if political opposition slows US data-centre construction, Goldman Sachs strategist Timothy Moe said.
Investors were concerned that Democrats’ sweeping victory in the US midterm elections could bring tighter restrictions on data-centre development.
Asian technology stocks fell Friday as markets absorbed the Nasdaq Composite’s 5.5% overnight decline in the United States.
The Nasdaq Composite sank 5.5% and closed more than 10% below its recent peak. The Philadelphia Semiconductor Index plunged 12.2%, underlining the breadth of the selling among chipmakers.
In South Korea, SK Hynix plunged over 8% and Samsung Electronics shed 7%. LG Innotek fell 10%, while LG Display fell 7.7%.
Losses reached across the region. TSMC slid 9.6%, Advantest plunged 12.2%, Kioxia Holdings fell nearly 10%, Renesas Electronics declined 7.5%, and Tokyo Electron slid 7.3%.
Companies tied to semiconductor demand also came under pressure. SoftBank Group tumbled 11.6%, while Hon Hai Precision Industry and Foxconn Technology fell 9.4% and 9.1% respectively.
Chinese technology shares declined as well. The tech-heavy STAR Market tumbled more than 4%, and the ChiNext Artificial Intelligence Index also tumbled more than 4%.
Moe said investors unwinding positions, stop-loss selling and heightened volatility had exacerbated the sell-off. “The market's tendency is always to shoot first and ask questions later. I think that's exactly what's happening now,” he said.
He said opposition to US data-centre construction could affect demand and profits for Asian AI hardware suppliers. “If there's concern about the speed and magnitude of buildout in the U.S., then obviously that's going to put all that into question,” Moe said.
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