Asian semiconductor stocks plunged on May 17 as Japanese and Taiwanese markets experienced sharp declines following a US semiconductor selloff. Kioxia Holdings dropped 16.1% to 52,110 yen, while Tokyo Electron fell 8.17% and Advantest declined 7.2%, dragging the Nikkei 225 index down 4.03%. In Taiwan, TSMC fell 7.29% and MediaTek dropped 8.92%, pushing the Taiwan Weighted Index down 6.47% to its lowest level in approximately two months. The widespread decline followed TSMC's stronger-than-expected earnings report, which failed to prevent profit-taking as investors reacted to concerns about AI infrastructure investment amid reports of data center project cancellations and delays. The selloff extended a US semiconductor stock decline from May 16, when the Philadelphia Semiconductor Index fell 4.3%.
Japanese and Taiwanese Semiconductor Stocks Record Sharp Declines on May 17
On May 17, Kioxia Holdings fell 16.1% from the previous trading day to 52,110 yen, approximately half its record high set last month. Other Japanese semiconductor-related stocks also declined significantly, with Tokyo Electron dropping 8.17% and Advantest falling 7.2%. The Nikkei 225 index fell 4.03% on the day, recording its fifth-largest intraday decline in history with a drop exceeding 6% at one point during trading.
In Taiwan, semiconductor stocks fell in unison on May 17. TSMC declined 7.29% and MediaTek dropped 8.92%, causing the Taiwan Weighted Index to plunge 6.47%. This represented the index's lowest level in approximately two months, with the decline rate being the largest since April 7 of last year.
US Semiconductor Stocks Fall on May 16 Amid Profit-Taking
Major US semiconductor stocks experienced sharp declines on May 16 (local time). Micron's stock price fell 5.65% from the previous trading day. SanDisk dropped 12.63%, Seagate Technology fell 10.00%, and Western Digital declined 9.15%. Major semiconductor companies including Intel (-5.84%) and AMD (-5.33%) also experienced falling stock prices. The Philadelphia Semiconductor Index fell 4.3% on that day.
SK Hynix's American Depositary Receipt (ADR) fell 13.69% on May 17, following a 9% decline the previous day.
Data Center Project Concerns and Hedge Fund Exposure Reduction Drive Market Sentiment
Concerns about artificial intelligence (AI) infrastructure investment have grown as news of data center construction project cancellations and delays has emerged. Additional concerns arose from reports that cloud company CoreWeave is considering hedge strategies in preparation for memory price declines, fueling worries about semiconductor sector peak performance.
Profit-taking sales have continued among institutional investors. According to The Wall Street Journal on May 16, Goldman Sachs analyzed in a memo the previous day that hedge funds' exposure to AI-related stocks had fallen to the year's lowest level. This is interpreted as hedge funds selling AI-related stocks that recorded explosive growth in the first half of the year to lock in profits.
Lee Kyung-min, a researcher at Daishin Securities, stated: "The entire semiconductor sector continues its sharp decline as investor sentiment weakens due to various negative factors related to semiconductors. TSMC's second-quarter net profit exceeded market expectations and presented plans to expand capital investment based on confidence in the AI mega-trend, but the market saw renewed sell-on-news activity."
FAQ
What caused Asian semiconductor stocks to fall on May 17?
Asian semiconductor stocks fell on May 17 following a US semiconductor selloff from May 16, combined with growing concerns about AI infrastructure investment. Reports of data center project cancellations and delays, along with news that CoreWeave is considering hedge strategies for memory price declines, contributed to investor concerns about semiconductor sector peak performance.
How much did major semiconductor stocks decline on May 17?
On May 17, Kioxia Holdings dropped 16.1% to 52,110 yen in Japan, while Tokyo Electron fell 8.17% and Advantest declined 7.2%. In Taiwan, TSMC fell 7.29% and MediaTek dropped 8.92%. The Nikkei 225 index fell 4.03% and the Taiwan Weighted Index plunged 6.47%. SK Hynix ADR fell 13.69% following a 9% decline the previous day.
