Asian chip stocks slump as Meta plan spurs fears
I'm LongbridgeAI, I can summarize articles.Asian semiconductor stocks tumbled, driven by fears of AI computing overcapacity after Meta announced plans to sell access to its AI infrastructure. SK Hynix and Samsung shares dropped significantly, dragging down major indices like the KOSPI and Nikkei 225. Concerns were further fueled by reports of Apple potentially sourcing chips from Chinese manufacturers, signaling rising competition and technological catch-up in China. Investors are increasingly focused on ROI and potential overcapacity risks amid soaring memory prices.
Asian semiconductor stocks yesterday tumbled, tracking tech losses on Wall Street overnight after Meta Platforms Inc’s plan to develop a business that would sell access to artificial intelligence (AI) computing power raised worries about overcapacity.
Shares of SK Hynix Inc and Samsung Electronics Co slumped about 14 percent and 9 percent respectively, driving a 7.89 percent drop in South Korea’s KOSPI index in Seoul.
Tokyo’s Nikkei 225 lost 2.5 percent as memory maker Kioxia Holdings Corp plunged more than 13 percent and chip equipment maker Tokyo Electron Ltd shed 7.4 percent, while the TAIEX declined 0.58 percent as chipmaking giant Taiwan Semiconductor Manufacturing Co (台積電) fell 1.6 percent in Taipei.
A gauge of tech stocks in China plummeted 7.7 percent in its biggest drop since the Liberation day rout, with Montage Technology Co (瀾起科技) losing almost 15 percent in Shanghai.
Meta, which has been rushing to secure expensive data centers and other infrastructure to fuel its own AI ambitions, is forming a business to generate revenue from excess computing power sold to outside customers, according to people familiar with the matter.
One potential plan includes selling access to AI models that are hosted on Meta’s existing AI infrastructure, an approach similar to Amazon Web Services’ Bedrock offering, the people said.
Meta would run the data centers and chips that power the models, including its own Muse Spark models, and charge developers to access them.
The company is also considering selling access to “raw” computing capacity, akin to other so-called neocloud businesses such as CoreWeave Inc, the people said.
Development of the new business lines is part of Meta Compute, an internal initiative to build and manage the company’s AI infrastructure efforts, a person familiar with the plans said.
The report on Meta pressured some US cloud-computing providers and names across the AI infrastructure space such as Sandisk Corp, Micron Technology Inc and Corning Inc. The Philadelphia Semiconductor Index declined 6.3 percent.
The sector was also hit by concerns about rising competition.
Apple Inc is in talks to buy chips from two Chinese chipmakers ChangXin Memory Technologies Inc (長鑫存儲) and Yangtze Memory Technologies Corp (長江存儲), said people familiar with the matter, which would hurt South Korean manufacturers.
“It reflects the fact that China is catching up technologically,” Asset Management One Co executive strategist Takeru Ogihara said in Tokyo.
While memory stocks such as Kioxia have been supported by earnings, the real question is “whether the explosive earnings growth we’ve seen can continue indefinitely,” he said. “That’s much less certain.”
The latest jitters emerged as investors assessed the broader impact of soaring memory prices driven by AI demand. Apple late last month raised prices of all Macs, iPads, home devices and the Vision Pro, stoking concern that the rising costs would start to curb demand.
“The AI capex story remains intact despite the Meta headlines, but the market is becoming more selective,” Eugene Asset Management Co chief investment officer Ha Seok-keun said in Seoul. “Higher AI spending is no longer seen as an unconditional positive, with investors increasingly focused on ROI [return on investment] and potential overcapacity risk.”
Additional reporting by AP