(Bloomberg) -- A deepening selloff in US technology stocks is exposing a new vulnerability in Asia’s artificial intelligence trade: mounting financing costs could choke off the spending needed to sustain the boom, threatening earnings across a supply chain that has powered the region’s stock-market rally.
The pressure intensified last week as oil surged to $110 a barrel for the first time since May, stoking inflation concerns, and investors turned their attention to the trillions of dollars being borrowed to build AI infrastructure. An eight-session rout in US semiconductor shares — the longest since 2008 — wiped roughly 16% off the sector’s benchmark, while the Nasdaq 100 suffered its worst week since April 2025.
For Asia, where chipmakers and the hardware suppliers that make printed-circuit boards, precision components and manufacturing equipment have been among the biggest beneficiaries of the AI frenzy, the implications could be significant heading into Monday’s open.
A Goldman Sachs Group Inc. basket of regional AI hardware stocks tumbled 11% last week, its steepest decline since mid-July. The selloff showed little sign of abating despite an upbeat revenue outlook from Taiwan Semiconductor Manufacturing Co., underscoring how concerns over AI spending are spreading across the hardware supply chain.
Some of Asia’s standout performers were hit particularly hard in the maelstrom. Nan Ya Plastics Corp., a maker of printed circuit board materials and the best-performing stock on the MSCI Asia-Pacific Index this year, tumbled 12% from a record high. Rival Unimicron Technology Corp., the index’s second-best performer, fell 14% in a week, while Samsung Electro-Mechanics Co., which makes an array of electronic components, plunged 23%.