Global Sell-Off Triggers AI Chip Meltdown: SoftBank Takes a 9% Hit
A massive global sell-off in the artificial intelligence and semiconductor sectors sent tremors through Asian markets on Friday, July 18. SoftBank Group shares took a dive, plunging over 9% in Tokyo trading. This marked the Japanese conglomerate’s steepest single-day drop in months. The rout extended the steep overnight losses from Wall Street, where the Nasdaq Composite fell 1.47% and the VanEck Semiconductor ETF dropped 3.7%.
The sell-off was triggered by escalating investor anxiety over the justification of the AI industry’s hyper-scale infrastructure spending against actual returns. Despite TSMC — the world’s largest contract chipmaker — reporting a record quarterly profit jump of over 77% and raising its capital expenditure forecast to between $60 billion and $64 billion, investors interpreted the news as a sign of dangerous overinvestment. Consequently, TSMC shares fell 7.29% on Friday, despite the earnings beat.
The impact extended beyond SoftBank, causing widespread damage.
- Tokyo Electron lost over 8%
- Advantest slid 7.2%
- Memory chipmaker Kioxia plummeted over 16% after a U.S. federal jury in Texas ordered the company to pay $229 million in damages for infringing a Viasat computer memory patent.
Japan’s Nikkei 225 plunged 4%, entering correction territory, more than 10% below its June peak. Analysts at Bank of America cautioned that fund managers’ cash levels have dwindled to an “extremely low 3.6%,” advising clients to reduce risk exposure amid fears of an AI valuation bubble.
Source: CNBC – SoftBank sinks over 9% as Asia chip stocks track Wall Street AI sell-off