Nasdaq sell-off batters Asian chip stocks as SK Hynix, Samsung, Softbank, TSMC tumble

Key points

• Asian chip stocks fell sharply Friday after the Nasdaq dropped 5.5% and entered correction territory.
• SK Hynix fell over 8%, Samsung 7%, SoftBank 11.6% and TSMC 9.6% as selling spread regionally.
• Investors worried that a Democratic midterm win could bring tighter U.S. data-center restrictions.

Asian technology stocks fell sharply on Friday, following a sell-off on Wall Street overnight that pushed the Nasdaq Composite into correction territory. Renewed concerns about artificial intelligence spending drove the declines.

South Korea's SK Hynix dropped more than 8% and Samsung Electronics fell 7%, while LG Innotek and LG Display lost 10% and 7.7%. In Japan, Advantest plunged 12.2%, Tokyo Electron slid 7.3% and SoftBank Group tumbled 11.6%. Kioxia Holdings fell nearly 10% and Renesas Electronics 7.5%.

Taiwan and Wall Street losses

In Taiwan, TSMC slid 9.6%, while Hon Hai Precision Industry, also known as Foxconn, fell 9.4% and Foxconn Technology 9.1%. The Nasdaq Composite had sunk 5.5% and closed more than 10% below its recent peak, and the Philadelphia Semiconductor Index plunged 12.2%.

The article links the worries to the Democrats' sweeping victory in the U.S. midterm elections, which investors fear could lead to tighter restrictions on data-center development and slower demand for AI chips and related infrastructure.

The market's tendency is always to shoot first and ask questions later. I think that's exactly what's happening now.

— Timothy Moe

What an analyst said

Timothy Moe, chief Asia Pacific equity strategist at Goldman Sachs, told CNBC's "Squawk Box Asia" that unwinding positions, stop-loss selling and heightened volatility had worsened the sell-off in Asian equities. He said potential political opposition to U.S. data center construction may affect demand and profits for Asian AI hardware suppliers.