SoftBank sinks over 10% as Nvidia-fueled rout sweeps Asian chip names

A sector-wide pullback hit Asian chip stocks Friday, led by a steep decline in SoftBank, after Nvidia‘s sharp drop overnight defied its stronger-than-expected earnings and bullish outlook.

SoftBank plunged more than 10% in Tokyo. The Japanese tech conglomerate recently offloaded its Nvidia shares but still controls British semiconductor company Arm, which supplies Nvidia with chip architecture and designs.

SoftBank is also involved in a number of AI ventures that use Nvidia’s technology, including the $500 billion Stargate project for data centers in the U.S.

South Korea’s SK Hynix fell nearly 10%. The memory chip maker is Nvidia’s top supplier of high-bandwidth memory used in AI applications. Samsung Electronics, a rival that also supplies Nvidia with memory, fell over 5%. 

Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker and manufacturer of Nvidia’s chip designs, was down over 4% in Taipei. 

Taiwan’s Hon Hai Precision Industry, also known as Foxconn, which manufactures server racks designed for AI workloads, dipped 4%.

The retreat in major Asian semiconductor giants comes after Nvidia fell over 3% in the U.S. on Thursday, despite beating Wall Street expectations in its third-quarter earnings the night before. 

The company also provided stronger-than-expected fourth-quarter sales guidance, which analysts said could lift earnings expectations across the sector. 

However, smaller chip players in Asia were not spared either.

In Tokyo, Renesas Electronics, a key Nvidia supplier, fell 2.3%. Tokyo Electron, which provides essential chipmaking equipment to foundries that manufacture Nvidia’s chips, was down 5.32%. 

Another Japanese chip equipment maker, Lasertec, was down over 3.5%.