Asian tech stocks drop with SK Hynix plunging 10% after Wall Street AI names fall

Asian tech stocks fell Thursday, tracking U.S. peers that pulled back in overnight trading, underscoring heightened volatility in tech names globally. In Japan, SoftBank Group dropped 4.36%, while chip equipment maker Tokyo Electron was over 5% lower. Advantest lost 2.14%, and Japanese memory chipmaker Kioxia declined 8.84%. In South Korea, SK Hynix fell 9.71% and Samsung Electronics declined 6.13%. Seoul Semiconductor dropped 4.27%. Taiwan's TSMC, the world's largest contract chip manufacturer, was 1.46% lower. Tech stocks have seen heightened volatility in recent sessions, with South Korea's semiconductor-heavy market whipsawing between steep losses and record gains. Despite this volatility, analysts remain optimistic about the tech sector’s outlook. J.P. Morgan noted in a Wednesday report that the tech sell-off in Asia had not derailed AI investment cycles, and the bank did not expect hyperscalers to cut back on investment. "Stepping away from share price moves, we do not see any fundamental indicators signaling meaningful weakness in the next 6-12 months," J.P. Morgan stated. Global growth is driven by AI and defense spending, per S&P Global’s report dated August 5. "A growing source of momentum is coming from the technology sector," it added. The global purchasing managers' index output for tech equipment increased in July at the fastest rate since May 2021, alongside rising demand for software and IT services, marking the fastest growth for ten months.