Asian tech stocks fall amid renewed volatility in AI-linked shares

Asian technology stocks declined on Thursday, tracking losses on Wall Street as concerns over the sustainability of artificial intelligence-related spending fueled renewed volatility across the sector.

In South Korea, SK Hynix was down 2.2% after plunging nearly 10% earlier in the session, while Samsung Electronics declined 6.3% and Seoul Semiconductor lost 3.7%.

In Japan, technology investment company SoftBank Group fell 3.4%, while chipmaking equipment producer Tokyo Electron dropped more than 5.4%.

Semiconductor testing equipment maker Advantest lost 2.6%, and memory chip producer Kioxia declined 9.2%.

Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, fell 1.66%.

The losses followed a retreat in US technology shares during overnight trading as investors continued to assess whether the rapid expansion in AI-related spending could be sustained.

Asian semiconductor stocks have recorded sharp swings in recent sessions, with South Korea's chip-heavy equity market alternating between steep losses and record gains.

Despite the volatility, JPMorgan said the recent regional technology sell-off had not disrupted the broader AI investment cycle, according to CNBC.

The bank said it did not expect major cloud computing companies, known as hyperscalers, to significantly reduce capital spending and saw no fundamental indicators pointing to meaningful weakness over the next six to 12 months.

S&P Global said technology and defense spending were supporting global economic growth.

The global purchasing managers' index for technology equipment output increased in July at its fastest pace since May 2021, while the broader technology sector recorded its strongest growth in 10 months.