Asian chip stocks fall after Nvidia sell-off on Wall Street overnight

People walk past the logo of Samsung Electronics in Seoul on July 7, 2022. South Korea’s Samsung Electronics Co Ltd turned in its best April-June profit since 2018 on Thursday, underpinned by strong sales of memory chips to server customers even as demand from inflation-hit smartphone makers cools.

Jung Yeon-je | Afp | Getty Images

Global semiconductor and associated stocks fell on Wednesday, following a steep plunge in Nvidia’s share price in the U.S. overnight.

In the U.S., chipmakerNvidiaplunged more than 9% in regular trading, leading semiconductor stocks lower amid a sell-off on Wall Street. Economic data published Tuesday resurfaced jitters about the health of the U.S. economy. Nvidia shares continued sliding in post-market trading Tuesday, falling 2%, afterBloomberg reportedthat the company received a subpoena from the Department of Justice as part of an antitrust investigation.

Around $279 billion of value was wiped off of Nvidia on Tuesday, in the biggest one-day market capitalization drop for a U.S. stock in history. The previous record was held by Facebook-parent Meta, which suffered a $232 billion fall in value in a day in February 2022.

Nvidia’s value chain extends to South Korea, namely, memory chip maker SK Hynix and conglomerate Samsung Electronics.

Samsung shares closed 3.45% lower, while SK Hynix, which provides high bandwidth memory chips to Nvidiaslid 8%.

Tokyo Electron dropped 8.5%, while semiconductor testing equipment supplier Advantest shed nearly 8%.

Japanese investment holding companySoftBank Groupwhich owns a stake in chip designerArmfell 7.7%.

Contract chip manufacturer Taiwan Semiconductor Manufacturing Company declined more than 5%. TSMC manufactures Nvidia’s high-performance graphics processing units which power large language models — machine learning programs that can recognize and generate text.

Taiwan’sHon Hai Precision Industry— known internationally as Foxconn — lost nearly 3%. It has a strategic partnership with Nvidia.

The selling in Asia filtered through to European semiconductor stocks. Shares of ASMLwhich makes critical equipment to manufacture advanced chips, fell 5% in early trade. Other European names such as ASMI, Be Semiconductor and Infineonwere all lower.

—CNBC’s Lim Hui Jie contributed to this report.