Asia chip stocks fall, AI funding worries

A broad sell-off in technology hardware stocks deepened across Asia as investors reacted to hotter-than-expected U.S. inflation data and renewed fears of further Federal Reserve rate hikes. South Korean memory leader SK Hynix plunged about 10% and Samsung Electronics fell roughly 7.1%, while other Korea names such as LG Innotek, Seoul Semiconductor and Samsung SDI dropped 8.1%, 7.7% and 6.8%, respectively. Japanese tech and equipment stocks also slumped, with SoftBank down 7.9%, Advantest off 6.9%, Tokyo Electron down 5.4% and Renesas off 5.4%. The weakness tracked a sharp pullback on Wall Street, where the Nasdaq fell 1.88% to 26,692.87, the S&P 500 lost 1.11% to 7,718.94 and the Dow slipped 0.09%.

The market rout centers on concerns that rising Treasury yields and higher borrowing costs will make the massive capital spending needed to build AI infrastructure harder to finance. Chief executives at Broadcom and Intel warned that funding could become a major headwind to AI expansion, with Broadcom’s Hock Tan calling it potentially a bigger challenge than chip or electricity shortages. Tech analysts point out that higher yields above 5% raise financing costs but do not yet signal weaker demand for AI computing; the pullback is seen by some as a buying opportunity unless hyperscalers cut capex, cancel contracts or GPU rental prices begin to fall.