Global technology shares slumped on Friday, pushing the US index that tracks semiconductor companies toward its worst weekly performance since last year’s so-called "Liberation Day" market drop. Investors have begun to unwind positions in some of the largest beneficiaries of the artificial intelligence boom, triggering a broad sectoral correction.
Market moves
- Asian markets were dragged lower by a sharp sell-off on Wall Street the previous evening: Japan’s Nikkei 225 fell 4 percent, while China’s CSI 300 declined 3.6 percent. South Korean exchanges were closed.
- US futures suggested a weak open: Nasdaq 100 futures were down about 1.6 percent and S&P 500 futures around 0.9 percent.
- The Philadelphia Semiconductor Index lost 8.5 percent this week, the biggest weekly drop since the tariffs-related downturn in April 2025 associated with former President Donald Trump’s so-called "Liberation Day" measures. The index now stands roughly 19 percent below its June record high.
Biggest losers
- Technology names in Asia suffered steep declines: Kioxia plunged more than 16 percent and is now over 50 percent below its June peak. Taiwan Semiconductor Manufacturing Company (TSMC) fell more than 7 percent.
- Chinese AI startups were hit hard after Moonshot AI unveiled a large language model that narrows the capability gap with leading US developers: Z.ai dropped 27 percent and MiniMax fell 16 percent.
- In Europe the Stoxx Europe 600 was down 0.9 percent at the open, while semiconductor-equipment maker ASML slid 3.9 percent.
- Selling continued in US tech stocks: the Nasdaq Composite lost 1.5 percent on Thursday as investors dumped shares of memory and storage companies. SanDisk, Western Digital and Seagate each fell more than 9 percent; Intel and Micron ended about 6 percent lower.
Why it matters
Analysts say the rout reflects both profit-taking and rising geopolitical risks. Renewed tensions in the Middle East, higher energy prices and expectations for tighter monetary policy worldwide have prompted risk reductions. Richard Yetsenga, ANZ’s chief economist and head of research, noted that many markets and a large portion of economic activity are currently heavily exposed to the AI boom. Wee Khoon Chong, BNY’s chief strategist, said sentiment has shifted as central banks appear less dovish than previously expected and renewed geopolitical strain puts inflation back into focus.
Hedge fund managers reported that while they maintain significant hedges, losses have grown as market volatility spiked; one broker said concerns over mounting losses are already overriding rational decision-making at some asset managers.
Still a strong annual showing
Despite the recent pullback, Asia’s chipmakers remain among this year’s biggest AI winners. Over the past year Kioxia shares have risen by more than 2,000 percent; TSMC’s stock has more than doubled. Samsung Electronics has gained over 200 percent and SK Hynix—supplier of high-bandwidth memory used by Nvidia—has climbed more than 500 percent year-on-year.
Overall, the market is grappling with rapid profit-taking, geopolitical uncertainty and monetary-policy concerns, producing a sharp correction particularly concentrated in technology and semiconductor stocks.
