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Asian stock markets suffered heavy losses on Thursday, with South Korea and Japan leading a regional selloff as semiconductor stocks plunged amid growing Chinese competition and stronger-than-expected U.S. inflation.
South Korea’s KOSPI dropped 7.2%, while Japan’s Nikkei 225 declined 4.7%. The MSCI Asia Pacific Index fell nearly 3%, approaching its lowest level since July. Hong Kong’s Hang Seng lost 1.1%, while China’s CSI 300 and Shanghai Composite declined 1.4% and 1.5%, respectively.
The downturn followed losses on Wall Street, where the Nasdaq Composite fell 1.9%. The Philadelphia Semiconductor Index recorded its sixth consecutive decline, its longest losing streak since May 2025.
Semiconductor companies faced particularly sharp selling pressure. South Korea’s SK Hynix plunged 11.2%, while Samsung Electronics dropped 9.4%. Japan’s Kioxia and LG Innotek declined more than 10%, while Taiwan Semiconductor Manufacturing Company (TSMC), Foxconn and Largan lost over 2%.
Investor concerns intensified after Chinese chipmaker ChangXin Memory Technologies (CXMT) advanced its higher-density DRAM technology, raising fears of increased competition in the global memory-chip market.
Broadcom CEO Hock Tan also warned about speculative artificial intelligence investments, adding pressure to technology valuations. Meanwhile, AI infrastructure company CoreWeave saw its shares plunge as much as 17% on Wednesday amid concerns about financing risks.
Investors are closely monitoring TSMC’s upcoming earnings report, hoping strong AI chip demand will support a sixth consecutive quarter of record profits.
Meanwhile, hotter-than-expected U.S. consumer inflation increased expectations that the Federal Reserve could raise interest rates again.
Market expectations for a 25-basis-point increase at the October 27-28 Fed meeting climbed to 31.6%, compared with 22.1% previously. Traders also anticipated approximately 40 basis points of additional tightening by January.
Federal Reserve Chair Kevin Warsh’s upcoming remarks in Bangkok and Thursday’s U.S. producer-price and retail-sales reports remain key market catalysts.
Elsewhere, Singapore’s Straits Times fell 0.9%, while Australian and New Zealand stocks slipped 0.1%.
Oil prices also weakened, with Brent crude declining $1.39 to $104.67 per barrel and U.S. West Texas Intermediate falling $1.02 to $94.07.
The combination of semiconductor competition, elevated AI valuations and persistent U.S. inflation continues to weigh on Asian equities, leaving investors cautious about further market volatility.
