Asian technology stocks suffered a sharp selloff on Friday, with SoftBank Group plunging more than 12% in Tokyo and major South Korean chipmakers dropping around 8%, as Apple's price increases highlighted growing cost pressures in the AI supply chain.
The selloff extended a fourth consecutive decline on the Nasdaq, where Apple lost 6.1% after announcing price hikes for iPads and MacBooks to offset rising memory and storage chip costs. The move erased roughly $250 billion from Apple's market value and shifted investor focus from AI-driven demand to the margin squeeze caused by infrastructure expenses.
SoftBank Hit by Arm Weakness and OpenAI IPO Delay
SoftBank was the hardest hit in Asia, sliding more than 12% as investors reassessed its exposure to crowded AI-linked bets. The decline reflected two key pressures: Arm Holdings, the chip-design company majority-owned by SoftBank, underperformed AI peers with a 3.2% drop overnight in the U.S. Additionally, a New York Times report indicated OpenAI is leaning toward delaying its initial public offering until 2027.
SoftBank has become a direct public proxy for OpenAI's private-market valuation, making the IPO delay a significant overhang. Jay Ritter, a professor emeritus at the University of Florida's Warrington College of Business, described SoftBank as offering investors a "leveraged bet on OpenAI's future," according to GlobalTimesNow.
While Qualcomm's chip partnership with Meta could support Arm through licensing and royalty demand, Ortus Advisors' Andrew Jackson warned that Qualcomm's deeper push into custom CPUs creates competitive questions for Arm's business model.
Memory Chip Stocks Under Pressure
The rout spread swiftly to South Korea, where SK Hynix plunged more than 8% and Samsung Electronics lost nearly 9%. SK Square, a holding company with exposure to SK Hynix, dropped around 13%, reflecting investor risk reduction in leveraged AI-linked plays.
The selloff, though smaller than earlier in the week, underscored a shift in how memory stocks are judged. Investors are now focusing not just on demand but on how rising memory costs affect customers' margins. Apple's price hikes provided a clear example: if memory and storage prices continue to climb, hardware makers may face a choice between absorbing the hit or passing it to consumers.
Nigel Green, chief executive of deVere Group, told Reuters: "Micron tells us where the profits are. Apple tells us where the inflation is." Micron's results showed memory suppliers can generate extraordinary profits in this cycle, while Apple's move revealed those profits are someone else's cost.
Deutsche Bank analyst Peter Milliken recently noted that markets had become "fixated on short-term momentum." The weakness also hit other Korean tech names, including LG Electronics and Seoul Semiconductor, as investors reduced exposure to the broader hardware supply chain.
For context, the recent selloff echoes broader trends in the sector. In a related development, memory chip stocks plunged up to 10% on AI debt fears and rate hike bets, highlighting persistent volatility. Meanwhile, the AI and chip rout sank the Nasdaq 2.2%, with Micron plunging 12% earlier in the week.
This article is for informational purposes only and does not constitute financial advice.
