CANADA – 2025/08/07: In this photo illustration, the SoftBank Group (Soft Bank) logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
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Japanese tech stocks tumbled on Friday as a fresh rout in U.S. semiconductor shares spread across Asia, underscoring growing worries about AI spending.
Shares of SoftBank dropped 8.8%, while chip equipment maker Tokyo Electron lost 9% and Advantest slid 9.4%, tracking steep overnight losses on Wall Street.
Japanese memory chipmaker Kioxia plunged over 14% after a federal jury in Texas on Thursday ordered the firm to pay $229 million in damages after finding it infringed a Viasat patent related to computer memory technology.
South Korea’s markets were closed for a public holiday. On Thursday, shares of SK Hynix closed over 11% lower.
The declines followed another weak session for U.S. technology stocks, with the Nasdaq Composite falling 1.47% as semiconductor shares came under renewed pressure.
The VanEck Semiconductor ETF fell almost 4%, with Arm Holdings dropping more than 5%. Micron Technology, Advanced Micro Devices and Broadcom each lost more than 5%, while U.S.-listed shares of SK Hynix slumped over 13%.
TSMC raised its full-year capital expenditure forecast to between $60 billion and $64 billion, up from $52 billion to $56 billion, but investors focused instead on concerns that the industry’s aggressive investment cycle might be becoming increasingly difficult to justify.
“Another wipe out for U.S. tech and AI with recent momentum winners taking another leg lower after TSMC’s earnings yesterday in Asia were not seen as strong enough to justify further upside for the sector and raising concerns over excessive spending,” said Andrew Jackson, strategist at Ortus Advisors.
Jackson said the sell-off reflected an unwinding of crowded AI momentum trades rather than a deterioration in the sector’s long-term fundamentals.
The latest losses extend a sharp reversal in global AI-related shares after months of outsized gains, with investors increasingly questioning whether lofty valuations can be sustained as spending on AI infrastructure continues to accelerate.
