Impact of Nvidia’s Stock Plunge on Asia’s Semiconductor Market

The semiconductor industry in Asia faced a significant blow on Wednesday morning as a result of Nvidia’s sharp decline in the U.S. market. The U.S.-based chipmaker, Nvidia, saw its stocks plummet by over 9% during regular trading hours, causing a ripple effect across the global semiconductor sector.

The drop in Nvidia’s share price was exacerbated by concerns over the health of the U.S. economy, as indicated by recent economic data releases. These factors contributed to a broader sell-off in semiconductor stocks on Wall Street, dragging down key players in the Asian market.

South Korean and Japanese Companies Suffer

In South Korea, companies closely linked to Nvidia, such as memory chip maker SK Hynix and conglomerate Samsung Electronics, experienced significant losses. Samsung saw a 2.6% decline in its shares, while SK Hynix plummeted by over 6%, leading to a 2.5% drop in the Kospi index. The smaller Kosdaq index also witnessed a 3% decrease in value.

Direct Suppliers to Nvidia Feel the Impact

Direct suppliers to Nvidia, including Tokyo Electron and Advantest, were not spared from the fallout. Tokyo Electron’s stocks dropped by 7%, while Advantest saw a more significant decline of over 8%. Additionally, Japanese investment holding company SoftBank Group, which has a stake in chip designer Arm, recorded a 6% decrease in its share price.

Taiwan Semiconductor Manufacturers Take a Hit

Contract chip manufacturer Taiwan Semiconductor Manufacturing Company (TSMC), responsible for producing Nvidia’s high-performance graphics processing units, experienced a decline of 4.3% in its stock value. Another Taiwanese company, Hon Hai Precision Industry (Foxconn), known for its strategic partnership with Nvidia, also suffered a 5% drop in shares.

The repercussions of Nvidia’s market cap loss, totaling $279 billion, have reverberated globally, impacting not only the U.S. market but also sending shockwaves throughout Asia’s semiconductor industry. The uncertainty surrounding Nvidia’s future, coupled with economic concerns and the interconnected nature of the semiconductor supply chain, have created a challenging environment for investors and stakeholders in the region.