Asian AI Supplier Stocks Slide as US Tech Selloff and Rising Borrowing Costs Strains Spark Fear

A major drop in US technology shares and climbing borrowing costs are threatening the artificial intelligence boom across Asia. US semiconductor shares went through an eight-session rout, wiping roughly 16% off their benchmark, while oil prices hit $110 a barrel for the first time since May and fueled inflation worries.

Market Impact

Asian chipmakers, hardware suppliers, and makers of printed-circuit boards felt heavy pressure heading into the market open. A Goldman Sachs Group Inc. basket of regional AI hardware stocks fell 11% in its steepest drop since mid-July. Top performers took some of the hardest hits as Nan Ya Plastics Corp. tumbled 12% from a record high, rival Unimicron Technology Corp. dropped 14%, and Samsung Electro-Mechanics Co. plunged 23% in a single week.

Funding and Debt Concerns

Investors are growing anxious over the trillions of dollars borrowed to build AI infrastructure. Bonds of neocloud provider CoreWeave Inc. sank to distress levels while its shares slumped 12% on a Friday, capping a 25% weekly loss. Gartner Inc. warned that over $3.5 trillion of AI infrastructure spending could be at risk of impairment by 2030 if investment outpaces revenue. Broadcom Inc. Chief Executive Officer Hock Tan stated that capital will become the biggest constraint on AI growth rather than chip shortages.

Context

Asian tech giants like Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co., and SK Hynix Inc. form the core of the global hardware supply chain. When financing costs rise for data centers and cloud operators in Western markets, reduced spending flows directly down to these hardware enablers and component suppliers.