People walk past the logo of Samsung Electronics in Seoul on July 7, 2022. South Korea’s Samsung Electronics Co Ltd turned in its best April-June profit since 2018 on Thursday, underpinned by strong sales of memory chips to server customers even as demand from inflation-hit smartphone makers cools.
Jung Yeon-je | Afp | Getty Images
Asia’s semiconductor and associated stocks slipped Wednesday morning, following a steep plunge in Nvidia’s share price in the U.S. overnight.
In the U.S., chipmaker Nvidia plunged more than 9% in regular trading, leading semiconductor stocks lower amid a sell-off on Wall Street. Economic data published Tuesday resurfaced jitters about the health of the U.S. economy. Nvidia shares continued sliding in post-market trading Tuesday, falling 2%, after Bloomberg reported that the company received a subpoena from the Department of Justice as part of an antitrust investigation.
Nvidia’s value chain extends to South Korea, namely, memory chip maker SK Hynix and conglomerate Samsung Electronics.
Samsung shares slid 2.6%, while SK Hynix fell more than 6%, dragging the wider Kospi index down 2.5%. The small-cap Kosdaq fell 3%. SK Hynix provides high bandwidth memory chips to Nvidia, which are used in AI chipsets.
Tokyo Electron dropped 7%, while semiconductor testing equipment supplier Advantest shed more than 8%.
Japanese investment holding company SoftBank Group, which owns a stake in chip designer Arm, fell 6%.
Contract chip manufacturer Taiwan Semiconductor Manufacturing Company declined 4.3%. TSMC manufactures Nvidia’s high-performance graphics processing units which power large language models — machine learning programs that can recognize and generate text.
Taiwan’s Hon Hai Precision Industry — known internationally as Foxconn — lost 5%. It has a strategic partnership with Nvidia.
On Tuesday stateside, Nvidia wiped out $279 billion in market cap.
—CNBC’s Lim Hui Jie contributed to this report.
As we can see, the semiconductor industry is heavily influenced by events happening across the globe, particularly in major markets like the United States and South Korea. The interconnectivity of these companies means that when one giant falls, others tend to follow suit. Nvidia’s recent struggles have sent shockwaves through the market, causing a ripple effect that has impacted various players in the industry.
Companies like SK Hynix, Samsung Electronics, Tokyo Electron, and others have all felt the repercussions of Nvidia’s downturn. The intricate web of relationships and dependencies in the semiconductor supply chain means that any disruption can have far-reaching consequences. This is a reminder of the fragility of the market and the need for companies to diversify their portfolios to mitigate risks.
As investors and industry observers watch these developments unfold, it serves as a valuable lesson in the volatility of the technology sector. What may seem like a minor incident in one part of the world can have significant implications on a global scale. The semiconductor industry’s resilience will be tested in the coming days as it navigates through these challenging times.
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Conclusion
In conclusion, the semiconductor industry is facing a period of uncertainty following Nvidia’s recent struggles. The fallout from this event has sent shockwaves through the market, impacting companies across Asia and the United States. The interconnected nature of the semiconductor supply chain means that any disruption can have widespread consequences, highlighting the need for companies to adapt and diversify their operations.
As we continue to monitor these developments, it is clear that the technology sector remains highly volatile and dynamic. Companies must stay vigilant and agile in order to weather such storms and emerge stronger on the other side. The semiconductor industry’s ability to innovate and adapt will be crucial in overcoming the challenges ahead and seizing new opportunities in the ever-evolving market.
Stay tuned for more updates on the semiconductor industry and the latest trends shaping the technology landscape. Thank you for reading!
