SoftBank and Japanese chip names fall as AI trade loses momentum

Japanese technology shares tied to artificial intelligence fell sharply on Friday, extending pressure from a U.S. semiconductor sell-off into Asian trading. CNBC reported SoftBank dropped 8.8%, Tokyo Electron lost 9% and Advantest declined 9.4%, while Kioxia fell more than 14% after an adverse U.S. patent verdict.

The moves followed a weaker Wall Street session in which the Nasdaq Composite fell 1.47% and chip shares came under renewed selling pressure. The pullback reflects a shift in investor focus from AI revenue potential to the scale and pace of capital being committed to the infrastructure needed to support it.

Chip-linked shares track U.S. declines

SoftBank, a major investor in technology and AI-related companies, was among the most visible decliners in Tokyo. Semiconductor equipment makers Tokyo Electron and Advantest also fell, mirroring the pressure seen in U.S. chip shares overnight.

In the U.S., the VanEck Semiconductor ETF declined almost 4%, according to CNBC. Arm Holdings dropped more than 5%, and Micron Technology, Advanced Micro Devices and Broadcom each lost more than 5%. U.S.-listed shares of South Korea’s SK Hynix fell more than 13%.

South Korean markets were closed on Friday for a public holiday. On Thursday, SK Hynix shares ended more than 11% lower in local trading, CNBC reported.

Kioxia hit by patent ruling

Kioxia’s decline added a company-specific shock to the broader sector sell-off. CNBC cited a Texas federal jury decision on Thursday ordering the Japanese memory chipmaker to pay $229 million in damages after finding that it infringed a Viasat patent linked to computer memory technology.

Memory companies are central to the AI supply chain because advanced computing systems require high volumes of data storage and fast access to that data. That link has tied their equity performance closely to investor sentiment around AI hardware demand.

TSMC spending plan draws scrutiny

The latest selling followed earnings from Taiwan Semiconductor Manufacturing Co., which raised its full-year capital expenditure forecast to a range of $60 billion to $64 billion, up from a previous range of $52 billion to $56 billion, CNBC reported.

Capital expenditure is the money a company commits to assets such as plants and equipment. In semiconductors, elevated capex can signal confidence in future demand, but it also raises the threshold for returns if customers slow orders or pricing weakens.

Andrew Jackson, strategist at Ortus Advisors, told CNBC that U.S. technology and AI shares had suffered “another wipe out” after TSMC’s results in Asia were not viewed as sufficient to support further sector gains and added to concerns about excessive spending.

Jackson said the selling reflected an unwinding of crowded AI momentum trades rather than a deterioration in the sector’s longer-term fundamentals.

The declines extend a reversal in global AI-related equities after months of strong gains. Investors are now weighing whether valuations can be sustained as AI infrastructure spending accelerates across chipmaking, memory, data centers and related equipment.

This story draws on original reporting from CNBC.