Why Asia’s AI Chip Trade Faces a Sudden Market Reckoning

Asian technology and chip stocks suffered a steep sell-off on November 6, 2026, after Wall Street investors turned against the AI trade. The immediate worry was not only whether massive data-center spending will produce enough profit, but also whether Democrats’ sweeping US midterm victory could bring tighter restrictions on new data-center projects.

That combination hit companies tied to the AI hardware buildout. TSMC fell 9.6%, while South Korea’s SK Hynix was losing more than 8%. Samsung Electronics lost 7%, LG Innotek dropped 10%, and Japan’s Advantest fell 12.2%. SoftBank Group dropped 11.6%, while Kioxia Holdings fell nearly 10%.

The selling moved across the region, but the damage was heaviest in markets packed with chip and technology companies. Investors were questioning whether the AI investment boom can continue at its current scale, and whether the spending on data centers will generate adequate returns for the businesses supplying the equipment.

Wall Street’s AI sell-off sets the tone

The previous US session delivered the warning sign. The Nasdaq Composite sank 5.5%, the Philadelphia Semiconductor Index plunged 12.2%, and the S&P 500 fell 4.4%. Nvidia dropped 9.3%, while Advanced Micro Devices tumbled 17.3%. The Nasdaq closed 11.9% below its all-time high and more than 10% below its recent peak.

The Nasdaq’s decline erased as much as $2.5 trillion, roughly €2.23 trillion, in market value. The move reflected doubts about the sustainability of the AI investment boom and whether heavy data-center spending will deliver profits that match the size of the investment.

Political concerns added another layer. Democrats seized control of both houses of the US Congress, while a number of Democratic governors-elect campaigned on slowing artificial intelligence development and promised to stop or pause data-center construction. Data centers have faced opposition from US voters across the political spectrum, and progressive US Senator Bernie Sanders called for a national moratorium on their construction.

For Asian suppliers, the concern is direct: fewer or slower US data-center projects could reduce demand for advanced chips, memory, testing equipment and other infrastructure. Timothy Moe, Goldman Sachs’ chief Asia Pacific equity strategist, said possible political opposition to US data-center construction may affect demand and profits for Asian AI hardware suppliers.

Indexes show the scale of the retreat

Taiwan’s market recorded one of the sharpest moves. The Taiwan Stock Exchange’s historical table showed the TAIEX falling to an intraday low of 37,837.05 on November 6 before closing at 39,701.64. The previous close, on November 5, was 41,574.72, meaning the intraday low stood 3,737.67 points, or 8.99%, below that level. The closing decline measured 1,873.08 points, or 4.51%.

The table also recorded lower closes throughout November 2–6, 2026, showing that the latest fall extended an existing retreat rather than arriving in isolation. TSMC dropped as much as 10% during the session in one reading, while another reading put its decline at 4.69%. The different figures reflect separate points during the market’s trading day.

Japan’s official index readings at 14:45 on November 6 put the Nikkei 225 at 57,562.37, down 3,515.53 points, or 5.76%. The Nikkei Semiconductor Stock Index fell 6.26% to 16,675.47, and the JPX-Nikkei 400 lost 6.03% to 33,676.15. The Nikkei Stock Average Volatility Index jumped 32.21% to 44.37, a sign that investors expected larger market swings. The dollar-denominated Nikkei Asia300 Investable Index fell 3.64% to 2,162.60.

South Korea’s Kospi was down 7.4% at 4,985.99 in a morning snapshot after falling as much as 8.8%, triggering a circuit breaker that suspended trading for 20 minutes. Other readings put the Kospi’s close at 5,059.69, down 6.0%. Samsung dropped as much as 11%, while SK Hynix lost nearly 14% before both stocks recovered part of their losses.

Chip makers bear the brunt

Japan’s chip-related shares also came under heavy pressure. Tokyo Electron traded down around 9% in one reading and slid more than 5% in another. Advantest fell 4.99% in one snapshot, while Kioxia Holdings declined 8.72% and Renesas Electronics fell 5.74%. SoftBank Group tumbled 10.83% in a separate reading, giving back more than 10%.

In Taiwan, Hon Hai Precision Industry, also known as Foxconn, declined 9.4%, while Foxconn Technology fell 9.1%. China’s STAR Market and the ChiNext Artificial Intelligence Index each lost more than 4%. The Hang Seng fell 0.7% to 24,630.03 in one reading, while another put it down 1.3% at 24,481.86. The Shanghai Composite declined 1.3% to 3,642.10 in one snapshot and 1.1% to 3,649.18 in another.

Timothy Moe said position unwinding, stop-loss selling and heightened volatility had intensified the Asian declines. “The market’s tendency is always to shoot first and ask questions later,” he said. “I think that’s exactly what’s happening now.”

Michael McCarthy, chief executive for Australia and New Zealand at online brokerage Moomoo, described the mood in plain terms: “It’s pretty clear there’s been a real shift in sentiment.” He said market turning points often bring strong disagreement and huge swings in either direction, adding that the emphatic sell-off showed the market’s direction had changed.

The retreat also reached Europe. The pan-European STOXX 600 dropped 1.6% in early trading, wiping out its gains for the week, while London, Paris and Frankfurt each fell more than 1% at the open. European technology stocks were among the least affected sectors in one morning reading, with losses around 0.25%; chip stocks ASML and ASMI rose 4% and 3%, respectively.

For now, investors are weighing two connected questions: whether AI spending can produce adequate returns and whether political resistance will slow the data-center construction needed to support that spending. Until those questions settle, the companies that powered the AI hardware boom remain exposed to every shift in expectations.

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