TLDR
- SoftBank plunged more than 10% in Tokyo trading as Asian chip stocks followed Nvidia’s U.S. decline
- SK Hynix fell 8.76%, Samsung dropped 5.77%, and TSMC declined 4.81% in the regional selloff
- Nvidia fell 3% despite beating Q3 earnings expectations and providing strong Q4 guidance
- SoftBank controls Arm and participates in the $500 billion Stargate AI data center project
- Smaller chip equipment makers like Tokyo Electron and Advantest also posted steep losses
SoftBank shares crashed more than 10% in Tokyo on Friday. The Japanese tech conglomerate led a broad selloff across Asian semiconductor stocks.
The decline followed Nvidia’s 3% drop in U.S. trading on Thursday. Nvidia fell despite posting earnings that beat Wall Street expectations and offering bullish guidance for the coming quarter.
SoftBank recently sold its Nvidia shares. However, the company still owns British chip designer Arm, which provides chip architecture to Nvidia.
The tech giant also holds stakes in several AI ventures using Nvidia technology. This includes the $500 billion Stargate project for U.S. data centers.
Regional Chip Stocks Take Heavy Losses
South Korea’s SK Hynix dropped 8.76% in Friday trading. The memory chip maker supplies high-bandwidth memory to Nvidia for AI applications.
Samsung Electronics fell 5.77%. The rival memory chip supplier also provides components to Nvidia.
Taiwan Semiconductor Manufacturing Company closed down 4.81%. TSMC manufactures Nvidia’s chip designs as the world’s largest contract chipmaker.
Foxconn, which makes server racks for AI workloads, slipped 4.86%. The company trades under the name Hon Hai Precision Industry in Taiwan.
Smaller Suppliers Feel the Pain
Tokyo’s Renesas Electronics dropped 2.65%. The company serves as a key Nvidia supplier.
Tokyo Electron fell 7.14%. The firm provides chipmaking equipment to foundries that produce Nvidia’s chips.
Lasertec declined 5.15% in the session. Advantest suffered the steepest loss, tumbling 12.1%.
Market Reaction Defies Strong Fundamentals
Nvidia beat third-quarter earnings expectations in its Wednesday night report. The company also issued stronger-than-expected fourth-quarter sales guidance.
Analysts suggested the guidance could lift earnings expectations across the semiconductor sector. Yet investors sold anyway.
Billy Toh from CGS International Securities Singapore pointed to multiple factors. He cited a Bitcoin selloff, delayed Federal Reserve rate cut expectations, and tighter financial conditions.
“Add in the ongoing talk of an AI bubble, which triggers a broader risk-off rotation, and naturally Nvidia becomes one of the first pressure points,” Toh told CNBC.
AI Demand Remains Strong
Nvidia reported Q3 data center revenue of $51.2 billion. The figure surpassed analyst estimates.
CEO Jensen Huang said “cloud GPUs are sold out.” He highlighted AI chip orders totaling $500 billion for 2025-2026.
The company shipped 13,000 GPU samples during the quarter. This included the new Blackwell DGX integrated AI server to OpenAI.
Oracle announced AI clusters scaling to over 131,000 Blackwell GPUs. The new Blackwell GPU showed 2.2x performance improvement over the previous Hopper generation in MLPerf tests.
Supply Chain Concerns Linger
ABF substrate capacity stands as a potential bottleneck. These specialized layers route power and signals beneath chips.
The market is projected to reach $11.11 billion in 2025. This represents a 9.4% compound annual growth rate.
New Chinese entrants are challenging established leaders. Companies like Anhui Splendid Technology and Aoxin Semiconductor Technology aim to break into a market where current leaders hold 70% share.
Advanced packaging and substrate supply timing could impact the AI server surge expected in 2025. SoftBank closed at $56.93, down $4.05 or 6.6% in U.S. trading.
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