AI chip rout hits Asian stock markets

Asian stock markets weakened on Friday as heavy selling in AI-related and semiconductor shares dragged regional benchmarks lower. The downturn followed a sharp pullback in U.S. chip names and spread to major technology counters across the region.

Losses were concentrated in companies tied to advanced chips and AI infrastructure, reflecting pressure on valuations in sectors that have rallied strongly this year. The broad retreat in these stocks weighed on overall market sentiment during the session.

Tokyo’s market was among the hardest hit, with the Nikkei 225 (NKY) falling about 5% on Friday. The index’s decline was driven by sharp drops in leading technology, semiconductor, and equipment makers that hold significant index weight.

SoftBank Group shares fell sharply as investors cut exposure to high-growth, AI-linked names. The move in SoftBank added to pressure on the broader Japanese market, which is heavily influenced by large-cap technology and investment holdings.

Japanese chip equipment makers saw some of the largest individual stock moves. Tokyo Electron dropped about 9%, while testing-equipment maker Advantest slid around 9–10%, mirroring the overnight weakness in U.S. semiconductor shares.

The declines underscored investor concerns around companies tied directly to chip fabrication and testing, which have been central beneficiaries of expectations for rising AI-related capital spending.

Memory chipmaker Kioxia recorded one of the steepest drops in the Japanese tech space, with its shares plunging in Friday’s session. The move came after a federal jury in Texas on Thursday ordered the company to pay $229 million in damages.

The jury found that Kioxia had infringed a Viasat patent, and the size of the damages award appeared to weigh heavily on investor sentiment toward the company. The verdict added a company-specific shock on top of the broader sector selloff.

South Korea’s markets were closed on Friday for a public holiday, limiting price discovery in one of the world’s major memory-chip hubs during a volatile period for the sector. Trading in other Asian centers reflected the global risk-off tone toward technology and AI-linked shares.

At the same time, oil prices moved higher amid intensified fighting in the Middle East. Brent crude traded near $85.13 a barrel and the U.S. benchmark around $79.95, adding another factor for investors to monitor alongside the sharp swings in technology and semiconductor stocks.