Asian semiconductor stocks faced sharp declines on Friday after Nvidia’s unexpected drop on Wall Street triggered a broad sector-wide pullback, despite the US chip designer posting stronger-than-expected earnings and offering an upbeat outlook.
The retreat was led by steep losses in Japan’s SoftBank, which fell more than 10% in Tokyo trading.
Broad declines across major Asian chipmakers
The selloff swept through key chip names across Japan, South Korea and Taiwan.
SoftBank, which recently exited its Nvidia stake but continues to control British chip designer Arm, was among the hardest hit.
Arm provides core architecture used in Nvidia processors, and SoftBank remains deeply entwined in AI infrastructure projects that rely on Nvidia’s technology, including the $500 billion Stargate data-center initiative in the US.
South Korea’s memory giants also felt the pressure.
SK Hynix, Nvidia’s largest supplier of high-bandwidth memory used in AI systems, slumped 8%. Rival Samsung Electronics, which likewise provides advanced memory chips to Nvidia, fell more than 5%.
In Taiwan, the world’s top contract chip manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), declined more than 4%.
TSMC fabricates Nvidia’s most advanced chip designs and is considered a critical pillar in the AI hardware supply chain.
Foxconn, also known as Hon Hai Precision Industry, dipped 4% as well.
The company produces server racks designed for AI workloads and is expected to benefit from continued investment in artificial intelligence-driven infrastructure.
The downturn followed Nvidia’s more than 3% drop in US trading on Thursday, despite reporting third-quarter results that exceeded Wall Street expectations and issuing guidance that analysts said could lift earnings estimates across the sector.
Smaller Asian chip players were hit too: Japan’s Renesas Electronics fell 2.6%, chipmaking equipment supplier Tokyo Electron dropped 6.5%, and Lasertec declined over 5%.
SoftBank expands AI investment push in the US
The slide in SoftBank shares came as new details emerged about the conglomerate’s growing involvement in US data-center development tied to OpenAI.
According to reporting from The Information, SoftBank plans to invest up to $3 billion to overhaul an electric vehicle plant in Lordstown, Ohio, and convert it into a facility producing equipment for OpenAI’s next generation of data centers.
The plant will manufacture hardware for sites in Milam County, Texas, and additional locations as part of the expansive Stargate project.
SoftBank purchased the Lordstown facility in August for $375 million, several months after selling its $5.8 billion stake in Nvidia to finance CEO Masayoshi Son’s sweeping AI investment strategy centered on OpenAI.
The Ohio site will also host a small demonstration data center.
Production of modular, pre-assembled data-center units, designed to accelerate deployment timelines, will begin early next year, according to the report.
Massive AI infrastructure plans highlight rising capital needs
The investment is part of a broader joint venture announced at the White House in January, in which SoftBank committed $18 billion, according to The Information.
SoftBank, OpenAI and Oracle plan to build five major US AI data centers as part of the $500 billion Stargate initiative.
OpenAI CEO Sam Altman, speaking on a livestream in October, described ambitions to build 30 gigawatts of computing capacity at an estimated cost of $1.4 trillion, eventually scaling to add around 1 gigawatt per week.
However, he noted that current costs exceed $40 billion per gigawatt, highlighting the substantial financial challenge ahead.
Unlike Meta and Google, OpenAI lacks a large advertising or cloud business to subsidize such investments, underscoring its dependence on partners like SoftBank.
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