The spillover also extended to other tech stocks, although to a smaller extent
Tech and chip-related stocks in Asia declined on Thursday, after U.S. chip company Nvidia reported its second-quarter results overnight, amid a wider drop in key markets.
Losses were most evident in companies with direct links to the chip company, such as South Korean chipmakers SK Hynix and Samsung Electronics.
SK Hynix, which manufactures high bandwidth memory chips — used in AI applications— for Nvidia, saw shares plunge 6.74%.
Samsung Electronics, the highest weighted stock on the South Korea’s benchmark stock index, Kospi, declined 3.8%.
While the extent of Samsung’s supplier relationship with Nvidia is not fully known, the firm is expected to be manufacturing HBM chips for some Nvidia products, according to Reuters.
Other direct suppliers to Nvidia such as Taiwan Semiconductor Manufacturing Company and Hon Hai Precision Industry — known internationally as Foxconn — saw losses of 2.8% and 2.96%, respectively.
The spillover also extended to other tech stocks, although to a smaller extent. Japanese semiconductor related stocks such as Renesas, Advantest and Tokyo Electron declined 3.2%, 3.6% and 3.49% respectively.
Separately, Chinese chipmakers listed in Hong Kong declined, despite being largely unrelated to the Nvidia value chain. SMIC, which is partially state owned, tumbled nearly 1.4%, while Hua Hong Semiconductor skidded 1.66%.
While the Nvidia beat quarterly revenue and earnings per share estimates, the drop in shares could have been triggered by concerns that the firm may not be able to deliver explosive growth in the current quarter, Luke Rahbari, CEO of Equity Armor Investments told CNBC’s ‘Squawk Box Asia.’
Rahbari said that the results are “really good”, but also noting that “For so many quarters, Nvidia had blown out expectations of analysts. People are maybe thinking the runaway train is slowing down a little bit.”
He still remains bullish on the firm, highlighting “no company in the world, in my estimation, has the position that Nvidia has in their industry, such a dominant position.”
