Gotrade News - Asia chip stocks sold off sharply tracking Broadcom's mixed quarterly earnings. The Nasdaq fell 0.89% while the S&P 500 dropped 0.74% and the Dow slid 1.21%.
The slide reflected fears that AI infrastructure spending may be cooling after Broadcom's soft guidance. That worry pressured nearly every major semiconductor name across Asia and the United States alike.
Key Takeaways
- Broadcom shares fell 12% after its AI chip guidance missed market expectations.
- Asia chip names including SoftBank and LG Electronics tumbled on the disappointing news.
- TSMC's chief insists structural AI demand remains strong for years ahead.
Broadcom guided to roughly $16 billion in AI chip revenue for its fiscal second quarter. That figure fell narrowly short of the $16.36 billion that Wall Street analysts had expected.
The miss triggered an immediate selloff across Asian exchanges during the next trading session. Many investors read the guidance as an early signal that AI capex growth is now moderating.
Selloff Spreads Across Asia
SoftBank shares slumped more than 10% while LG Electronics plunged as much as 14% intraday. Component suppliers Ibiden fell 8.4% and Wistron dropped about 8% during the same session.
According to Investing.com, Socionext sank 6.7% and Hon Hai eased roughly 4% on the day. Samsung and SK Hynix each declined between 2% and 4% amid the broad regional pressure.
Shares of TSMC (TSM) dipped only 0.8% despite the broad sector selloff. That relative resilience reflects its dominant position as the leading maker of advanced chip nodes.
On Wall Street, Nvidia (NVDA) shares fell 3.62% on the souring sector sentiment. Intel bucked the trend by rising 4.43%, while AMD gained 4.02% against the broader decline.
AI Demand Stays Intact
In contrast, TSMC Chief Executive C.C. Wei struck a notably upbeat tone on AI demand. He said global chip supply will fall short of AI needs for years to come.
As reported by Reuters, advanced-node capacity currently runs about three times short of demand. Wei also signaled openness to measured chip price increases to protect the company's margins.
On pricing, he stressed that the company still needs to make a fair profit. Yet Wei refused to raise prices abruptly the way memory makers have often done.
Meanwhile, AI chip startup Cerebras added a fresh competitive wrinkle to the hardware sector. Chief Executive Andrew Feldman said it works with every gear maker except Nvidia.
For investors, Wei's message offers an important counterweight to the day's broad selloff. Durable structural demand differs from a short-term price correction driven by a single report.
The Cerebras move also highlights an intensifying battle over the AI hardware supply chain among rivals. Several players are now racing to build alternative ecosystems beyond Nvidia's long-running market dominance.
Shares of Broadcom (AVGO) were the main catalyst behind this cross-region selloff. Investors now await clearer AI spending signals from the next batch of major chipmakers.
Sources
