Asian chipmaking and AI-related shares fell on Thursday, with the regional move reflecting investor reaction to Broadcom's post-close weakness in the United States. Broadcom slid about 12% in after-hours trade after reporting a quarter that combined slightly stronger-than-expected profit with revenue short of forecasts and issuing an unchanged AI chip revenue outlook for the current quarter.
Japanese and South Korean equities registered the largest declines, reversing some of the substantial advances those markets had enjoyed in recent weeks amid heightened enthusiasm around artificial intelligence.
Notable moves in Japan
- Softbank Group dropped more than 10%.
- Data-center components maker Ibiden fell 8.4%.
- Socionext, part of the AI data-center supply chain, declined 6.7%.
- Taiyo Yuden slid 3.2%.
South Korea and Taiwan
- Top memory suppliers Samsung Electronics and SK Hynix each fell in the 2% to 4% range.
- LG Electronics plunged nearly 14%.
- Taiwan’s Hon Hai Precision dropped nearly 4%.
- Wistron Corp tumbled about 8%; both Hon Hai and Wistron are key assemblers of AI servers.
- TSMC, the world's largest contract chipmaker, eased 0.8% - with the share move limited after CEO C.C. Wei said he was confident AI-driven demand would remain strong in the coming years.
The immediate catalyst for the sell-off was Broadcom’s after-hours retreat of roughly 12%. The company posted profit slightly above expectations for its fiscal second quarter but missed on revenue. Broadcom also kept its AI chip revenue projection for the current quarter unchanged at $16 billion, below the $16.36 billion that some market participants had expected. The combination of a mixed report and tempered guidance spurred profit-taking following a substantial run-up into the earnings release.
These losses spilled into other large chip names listed in the U.S., with major chipmakers, including Intel and AMD, also moving lower in aftermarket trading. The broader vulnerability of chip and AI-related equities reflects how pronounced gains earlier in May left the sector exposed to trimming of positions as sentiment cooled.
Market participants also cited a deterioration in broader risk appetite, in part linked to ongoing tensions in the Middle East, which contributed to a less favorable backdrop for risk assets and helped amplify the pullback in technology-linked shares.
Context and implications
The trading pattern illustrates how a single large-cap result and guidance can ripple through the supply chain and across regions, especially for companies tied to the AI data-center buildout. Names involved in component supply, assembly of servers, memory production and contract chipmaking all participated in the decline.
At the same time, comments from some executives, such as TSMC’s CEO, provided selective support and appeared to constrain steeper losses for a handful of large-cap suppliers, even as the sector broadly gave back recent gains.