After the Worst Week in Years, Asia’s Chip Stocks Bounce — With One Eye on Nvidia’s Boardroom
Monday brought relief to Asia’s trading floors, but not calm. Taiwan’s benchmark index jumped by more than 6 percent, Japan’s Nikkei gained 3.5 percent and South Korea’s Kospi rose 1.8 percent, a rebound that followed one of the sharpest sell-offs the region’s technology-heavy markets have seen in years. Taiwan had just recorded its steepest weekly fall in two decades.
The leaders of the bounce were the names most exposed to the artificial-intelligence build-out. TSMC rose by more than 6 percent and Foxconn by over 8 percent, while Samsung Electronics and SK Hynix, both suppliers to Nvidia, climbed roughly 2.7 and 4.8 percent. The broad MSCI index of Asia-Pacific shares outside Japan recovered part of the 4.6 percent it lost last week.
It was a rebound in search of a reason. Last week’s rout was driven by worries about chip demand and about how quickly AI spending can pay for itself, sharpened by fears that the US midterm results could bring tougher regulation of AI and data centres. None of those questions was answered over the weekend. One analyst quoted by the Straits Times argued that this week the only fundamental that matters is price: if bargain hunters appear, flows rather than earnings will drive the tape.
The week does carry a few tests. Results from CoreWeave, Applied Materials and Cisco will show how profitable the AI build-out looks from the supply side, and US consumer price data on Tuesday will feed into expectations of a December rate rise. Added to that is a fresh governance story: Nvidia’s board has opened an investigation into chief executive Jensen Huang’s relationship with a businesswoman whom US intelligence officials reportedly suspect of passing information to Beijing. Nvidia shares were indicated roughly 3 percent lower in out-of-hours trading, yet the company says Huang remains committed to his job.
For Seoul, the practical concern is supply. A senior South Korean ICT ministry official said contracted deliveries of Nvidia processors were expected to continue without disruption and that the ministry was watching developments and discussing prices and schedules with Nvidia’s Korean arm.
The lesson for Asian investors is uncomfortable but familiar: the region’s indexes have become, to a remarkable degree, a leveraged bet on a handful of chip companies and the mood in one American boardroom. A 6 percent day is a relief. It is also a reminder of how narrow the foundations are.