Nvidia AI server delay report sends Asian tech stocks sliding
The stock declines showed investors are wary of any potential negative developments after big runups in AI-related stocks
Add BT as a preferred source
[SINGAPORE] Asian technology stocks slumped after a report that Nvidia’s next-generation AI server rack system has been delayed by more than a year due to manufacturing difficulties.
Research firm SemiAnalysis said in an X post that Nvidia’s Kyber NVL144 hit setbacks in the construction of printed circuit boards for the platform. Nvidia did not respond to a request for comment outside of regular office hours.
The report landed as AI stock investors are growing increasingly jittery, with even the smallest setback sparking outsized reactions after the yearslong rally. Last week, global tech stocks whipsawed on headlines hinting at potential overcapacity in the AI buildup and growing competition.
Japan’s Ibiden, a PCB maker that counts Nvidia as its largest client, dropped as much as 10 per cent. Among related suppliers, Kingboard Laminates Holdings tumbled 18 per cent in Hong Kong, Elite Material fell 10 per cent in Taiwan and Samsung Electro-Mechanics slid 11 per cent in South Korea.
The SemiAnalysis report spurred “weakness across regional tech” on Monday (Jul 6), said Shawn Oh, head of Korea cash equities at NH Investment & Securities in Seoul. The prospect of a Kyber NVL144 delay together with other points in the post are “raising uncertainty around Nvidia’s next-generation scale-out roadmap and creating a wider competitive window for alternative AI platforms,” he added.
The stock declines showed investors are wary of any potential negative developments after big runups in AI-related stocks. Samsung Electro-Mechanics has surged more than 600 per cent this year, while Kingboard Laminates is up more than 470 per cent.
An MSCI gauge of sector shares is down 8.5 per cent in the past two weeks, extending its loss on Monday with PCB makers among the leading decliners.
A delay to Kyber does not necessarily imply weaker AI capex, but “it more likely suggests that Nvidia’s most ambitious next-gen system architecture may take longer to deploy, which is not entirely surprising”, said Gary Tan, a portfolio manager at Allspring Global Investments.
“Today’s weakness is driven more by profit-taking, sector rotation and caution ahead of the US reopening after the Jul 4 holiday,” Tan said. He also cited a possible drag from this week’s mega US listing for Korean memory maker SK Hynix
SEE ALSO
An earnings report due on Tuesday from Samsung Electronics is the next key point to watch for Asian tech stocks. BLOOMBERG
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
TRENDING NOW
Malaysian tycoon Vincent Tan’s sell-downs point to pruning rather than an exit plan
Singapore enters next phase of 5G roll-out as telcos achieve nationwide coverage
Not in education, employment or training: Why more Hong Kong youths are opting out of work
Beyond concerts and casinos: Selling a side of Singapore tourists can’t find elsewhere
