Shares of major Asian chipmaking stocks declined on Wednesday amidst profit-taking ahead of earnings reports from industry giants ASML and TSMC. Dutch lithographic equipment manufacturer ASML Holding NV (AS) (NASDAQ), the first to report, exceeded expectations with strong net bookings in the second quarter, driven by heightened demand from the artificial intelligence sector for lithographic equipment.
The robust performance of ASML is seen as a positive indicator for the chipmaking industry, where both ASML and Taiwan’s TSMC are considered pivotal players. TSMC (TW:2330) (NYSE), the world’s largest contract chipmaker, is set to report earnings on Thursday. Recent monthly data showed significantly higher-than-expected revenue for the second quarter, with forecasts pointing to a strong quarterly profit bolstered by sustained demand from AI applications.
Across Japan, China, and South Korea, chipmaking stocks experienced broad declines as investors awaited further signals on chip demand, particularly from AI sectors. The sector also faced profit-taking pressures following a significant run-up in valuations over the past year driven by AI optimism. Sentiment was additionally dampened by comments from U.S. Republican presidential candidate Donald Trump suggesting Taiwan should pay for U.S. defense supplies, which added to market uncertainties.
Any instability in Taiwan, a critical hub for global chip production through TSMC, poses challenges for the industry. TSMC’s stock price in Taiwan dropped approximately 2% in response to these developments.
In Japan, Tokyo Electron Ltd. (TYO:8035), the country’s leading chipmaker, recorded a 7.5% decline, while Advantest Corp. (TYO:6857) and Renesas Electronics Corp (TYO:6723) fell by 2.5% and 1.3%, respectively. South Korean firms also saw losses, with memory chipmaker SK Hynix Inc (KS:000660) falling 4.3% and Samsung Electronics Co Ltd (KS:005930) declining by 0.8%.
In China, Semiconductor Manufacturing International Corp (HK:0981), the largest chipmaker, saw a decrease of approximately 1% in its share price.
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