Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

Asian chipmakers fall, TSMC down 6% as demand warning offsets strong earnings

Published 04/18/2024, 11:50 PM
© Reuters
- Asian chipmaking stocks fell sharply on Friday after sector major TSMC flagged a weak outlook for the semiconductor industry, even as demand from artificial intelligence helped the firm clock stronger first-quarter earnings.

TSMC, formally known as Taiwan Semiconductor Manufacturing Corp (TW:2330) (NYSE:TSM), was among the worst performers in the sector, losing over 6% in Taiwan trade.

TSMC offered a middling forecast for semiconductor industry growth in 2024, with weak demand for consumer electronics likely to offset any boosts from the AI industry.

This came even as the world’s largest contract chipmaker clocked stronger-than-expected first-quarter earnings, on the back of increased demand for the AI industry.

But TSMC’s outlook largely overshadowed the positive earnings, especially given that the firm is considered as a bellwether for the semiconductor industry. 

Other Asian chipmaking majors retreated on Friday. South Korean memory chip makers SK Hynix Inc (KS:000660) and Samsung Electronics Co Ltd (KS:005930) slid 6.4% and 3.4%, respectively. 

SK Hynix fell even as it announced a partnership with TSMC to develop next-generation memory chips. 

In Japan, Tokyo Electron Ltd. (TYO:8035) and Advantest Corp. (TYO:6857) lost 7.7% and 5.5%, respectively, while Semiconductor Manufacturing International Corp (HK:0981), China’s biggest chipmaker, fell 2.2%.

ASML earnings also spur demand questions

Losses in chipmaking stocks had begun earlier this week after Dutch semiconductor technology maker ASML Holding NV (AS:ASML), which is also considered a bellwether for the chip industry, clocked weaker-than-expected first-quarter earnings.

This sparked questions over just how much demand the AI industry was actually providing for chipmakers, and whether it would be sufficient in offsetting weak demand from other sectors, specifically consumer electronics.   

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

Hype over AI had spurred a massive melt-up in chipmaking stocks through the first quarter, making them vulnerable to a sharp pullback if earnings do not meet expectations. 

NVIDIA Corporation (NASDAQ:NVDA) was a prime example of this. The stock was nursing a nearly 6% decline just days after ASML’s earnings, after tripling in value over the past year.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.