RESOLVING THE LEDGER
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Asian technology stocks extended their sell-off on Wednesday, with semiconductor names leading declines after another weak session in the U.S.
In South Korea, SK Hynix slid more than 10% after the chip giant missed analysts' estimates despite posting record quarterly profit and revenue. Samsung Electronics lost over 4%, while LG Innotek fell 9% and Seoul Semiconductor dropped over 6%.
The latest weakness in Asian chip stocks reflects "the ongoing deleveraging process in Korea and softer sentiment towards global technology stocks," said Kieron Poon, investment director of Asian equities at Aberdeen Investments, in a Tuesday note. However, he added that the recent volatility "has not changed our long-term positive view."
Japan's chip names also declined. Japan's computer memory manufacturer Kioxia was down 10%. Tokyo Electron fell 8.5%, while SoftBank Group , a major AI investment proxy through its stake in Arm , lost more than 7%.
Taiwan's TSMC , the world's largest contract chip manufacturer, was 1.32% lower.
Mainland China's tech-heavy ChiNext 300 index lost 1.83%, while the Hang Seng China Semiconductor Chips Index fell more than 5%.
The declines in Asia came on the heels of another weak session for U.S. semiconductor stocks overnight.
Nvidia sank at the open but closed the session flat. Intel dropped nearly 6% and AMD lost 8%. Memory space names Micron and Seagate lost more than 8%, Western Digital sank nearly 7% and Sandisk shed 14%. SK Hynix U.S. shares dropped 9%.
Despite the sharp pullback, Aberdeen sees the sell-off as an opportunity rather than a deterioration in fundamentals. "The recent market pullback has brought valuations to more attractive levels, creating opportunities for us to add exposure to high quality businesses at more reasonable prices," Poon said.
The recent pullback in AI-related chip stocks reflects investors "giving back a little bit of the froth that was in the AI market," David Riedel, founder and president of Riedel Research Group, told CNBC's " Squawk Box Asia " on Wednesday.
While concerns over AI financing and rising Chinese competition have weighed on sentiment, "the market is healthy," he said, adding that memory chipmakers "will be fine" but "just have to give back some of those sudden gains."
Chinese internet stocks listed in Hong Kong bucked the broader regional weakness with Tencent and Meituan up 3.6% and 2.7%, respectively. Alibaba , Baidu and Kuaishou all traded higher.
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