Broadcom's performance outlook is disappointing, and South Korean technology stocks lead the decline in the Asian market.
American artificial intelligence chip manufacturer Broadcom's performance outlook fell short of investors' high expectations, sparking concerns in the market that the AI spending boom may come with increased pressure on profitability. As a result, technology stocks in South Korea and Japan both saw a decline. On Friday, South Korean chip stocks followed the overnight drop of their American counterparts, leading to a significant decrease, prompting stock market operators to temporarily halt trading to reduce volatility. SK Hynix is a major high-bandwidth storage supplier for Nvidia, and its stock price dropped by 9.6% at one point. The world's largest memory chip manufacturer Samsung Electronics saw its stock price drop by 7.5% at one point. The combined market value of these two companies accounts for about half of the total market value of the South Korean composite index, and the sharp decline in their stock prices led to a five-minute trading halt for the benchmark index's constituent stocks. This trading curb measure, aimed at limiting excessive market fluctuations, was triggered by a drop of over 5% in the Kospi 200 futures index. The South Korean composite index fell by around 5% for most of the pre-market trading session. On Friday, semiconductor-related stocks led the decline in the Japanese Nikkei index. The benchmark index dropped by 1.6%. Chip manufacturer Renesas Electronics saw a recent decline of 6.3%, semiconductor production equipment manufacturer Tokyo Electron fell by 7.1%, and chip testing equipment manufacturer Advantest dropped by 4.9%.
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