Key facts
- South Korea's Kospi index fell over 8%, with Samsung Electronics and SK Hynix down approximately 9% each.
- Japan's Nikkei 225 dropped around 5%, largely due to SoftBank Group's 14% decline.
- SoftBank's slump was triggered by a report suggesting OpenAI could postpone its IPO.
- Alibaba's shares fell another 5% after Anthropic accused it of exploiting AI models.
- Market analysts expressed concerns about the sustainability of memory chip margins and AI investment durability.
- Apple's decision to increase prices for Macs and iPads due to memory chip shortages fueled demand reassessment.
Asian stock markets experienced a significant downturn on Friday, with South Korea's Kospi and Japan's Nikkei 225 indices leading the losses. The sell-off renewed concerns about the sustainability of the artificial intelligence-driven rally in semiconductor stocks.
South Korea's Kospi index was down over 8% by mid-afternoon local time, with major chipmakers Samsung Electronics and SK Hynix each falling around 9%. In Japan, the Nikkei 225 index declined approximately 5%, heavily influenced by a 14% drop in SoftBank Group's shares. This decline followed a New York Times report indicating that OpenAI, a significant AI investment for SoftBank, might postpone its initial public offering until next year.
Hong Kong's Hang Seng Index also saw losses, falling over 2%. Alibaba's stock continued its recent downward trend, dropping another 5% after Anthropic accused the Chinese technology giant of exploiting its advanced AI models.
The market retreat occurred as investors began to reassess the outlook for memory chip demand. This reassessment was partly triggered by Apple's decision to increase prices across its Mac and iPad lines, citing an unprecedented shortage of memory chips driven by demand from AI data centers. Fabien Yip, a market analyst at IG, noted that Apple's inability to absorb cost increases and its decision to pass them on to consumers raise questions about demand elasticity and the long-term viability of memory chip margins, potentially undermining a key pillar of the AI investment narrative.
This downturn followed a brief period of recovery on Thursday, where stronger-than-expected earnings from Micron Technology had temporarily boosted sentiment regarding AI-related demand. Both South Korea and Japan have seen strong equity market performance this year, largely fueled by gains in semiconductor and AI stocks, making them susceptible to sharp reversals. The week has been characterized by significant volatility, with the Kospi plunging nearly 10% earlier in the week before partially recovering.