Asian Tech Stocks Plunge as US Fears Mount Over Chip Shortages and Nvidia's Decline

SoftBank Group fell 9.2% after a regional tech selloff, led by a pullback in Nvidia. Japanese chip stocks like Advantest, Renesas Electronics, and Tokyo Electron also dropped. The weakness spread across Asia, with Taiwan's TSMC and South Korea's SK Hynix declining, while Samsung Electronics edged higher. In Hong Kong, the Hang Seng Tech Index lost 0.9%, with Kuaishou Technology, JD Health International, and Horizon Robotics also falling. The decline highlights the connection between Asia's semiconductor and technology sectors and US investor sentiment.

Asian tech stocks experienced a significant selloff on Wednesday, with SoftBank Group leading the decline. The Japanese tech-focused investment firm saw its shares plunge by as much as 9.17%, following a broader tech market downturn across Asia [1].

The selloff was triggered by overnight losses in U.S. tech stocks, particularly those in the semiconductor and artificial intelligence sectors. The Japanese tech stocks, including SoftBank Group, were not spared, with semiconductor giant Advantest falling by 6.27%, Renesas Electronics by 2.46%, and Tokyo Electron by 0.75% [1].

The decline in Asian tech stocks mirrored the broader trend in U.S. markets, where tech counters were hit by artificial intelligence darling Nvidia's share price drop. Nvidia's shares fell, prompting investors to reassess their positions in other tech stocks, including those in Asia [2].

The catalyst for the selloff was the consideration by U.S. Commerce Secretary Howard Lutnick of the federal government taking equity stakes in companies receiving funding under the CHIPS Act. This proposal sent shockwaves through the semiconductor and AI sectors, highlighting growing concerns about government intervention in the chip sector and AI valuations [2].

The impact of the potential government intervention was felt across Asia. Taiwan Semiconductor Manufacturing Company (TSMC), the world's most advanced chipmaker and a key manufacturing partner for Nvidia, saw its shares drop by 1.69%. Similarly, South Korean tech stocks mostly fell, with chipmaker SK Hynix declining by 3.33% [1].

In Hong Kong, the Hang Seng Tech Index lost 0.87% in early trade, with Kuaishou Technology declining by 4.8%, JD Health International by 3.31%, and Horizon Robotics by 2.29% [1]. The decline in these stocks underscores the interconnectedness of the global semiconductor supply chain and the vulnerability of tech markets to policy shocks.

The potential government intervention in the semiconductor sector highlights the delicate balance between government support and market forces. While the CHIPS Act aims to boost domestic semiconductor manufacturing, the proposed equity stakes could represent a significant shift in how the sector operates, potentially impacting investor sentiment and stock prices [3].

References:
[1] https://www.cnbc.com/2025/08/20/softbank-group-shares-plunge-over-9percent-as-asian-tech-stocks-decline-.html
[2] https://www.techbuzz.ai/articles/softbank-plunges-9-as-asian-tech-selloff-spreads
[3] https://www.tweaktown.com/news/107199/us-government-could-demand-equity-stakes-in-tsmc-sk-hynix-samsung-just-as-it-has-with-intel/index.html