Asian Semiconductor Stocks Plunge Amid US AI Investment Fears

Asian stock markets experienced severe declines driven by investor anxiety that the artificial intelligence and data-center build-out in the United States will slow following the midterm elections. The downturn hit semiconductor sectors hardest, with Japan's Nikkei Semiconductor Stock Index dropping 54% since its June peak and Kioxia shares falling nearly 37% last week.

In South Korea, the Kospi index plunged nearly 12% in a single week. Semiconductor leaders Samsung Electronics and SK Hynix saw their shares fall approximately 16% and 20%, respectively. To stem the selling, the Ministry of Economy and Finance of South Korea temporarily loosened collateral rules for brokerages.

Regional governments took aggressive steps to curb volatility. Taiwan mobilized its $15 billion National Financial Stabilization Fund and restricted short selling. The market rout has intensified political pressure on Lee Jae Myung, the President of South Korea, who had previously warned that "a correction was inevitable". Seoul Mayor Oh Se-hoon criticized the administration's approach, stating that the government's "reckless arrogance in thinking it could move the market has ultimately opened the gates of hell".