Asian AI hardware stocks slide 11% as financing fears threaten the spending boom

Asian suppliers to the AI boom suffered a sharp weekly reversal as investors questioned whether their customers could keep financing new infrastructure. A Goldman Sachs basket of regional AI hardware stocks fell 11% in the week before October 18, its worst decline since mid-July, putting the funding behind future sales under scrutiny.

The risk shifts from chips to financing

The retreat followed an eight-session slide in US semiconductor shares, the longest since 2008. The Philadelphia semiconductor index lost about 16% over that stretch. Oil reached US$110 a barrel for the first time since May, adding to fears that inflation would keep borrowing costs elevated.

The concern extends beyond whether companies want more AI chips. Investors are questioning whether large cloud companies and specialized AI cloud operators can finance the data centers needed to use them—and earn enough to justify the investment. Demand for computing and the ability to fund its expansion are different questions.

CoreWeave brought that financing risk into focus. The AI cloud provider’s shares fell 12% on Friday and 25% over the week. Its bonds sank to levels signaling financial distress as investors questioned whether AI demand and revenue could support the borrowing behind its expansion.

Rising borrowing costs could make infrastructure projects harder to finance and delay spending. Even a delay could trigger a reset in Asian suppliers’ earnings expectations and valuations.

Jian Shi Cortesi, fund manager at GAM Investment Management, speaking to Bloomberg

Component suppliers absorb the shock

Some of the region’s strongest performers suffered particularly steep losses. Nan Ya Plastics and Unimicron Technology were the MSCI Asia-Pacific Index’s best and second-best performers in 2026, respectively. The selling reached suppliers of circuit-board materials and electronic components, not just the manufacturers of advanced processors and memory.

• Nan Ya Plastics, which makes printed-circuit-board materials, fell 12% from a record high.
• Unimicron Technology fell 14% in a week.
• Samsung Electro-Mechanics, an electronic-components supplier, plunged 23%.

Kevin Net, a portfolio manager at Financiere de l’Echiquier, told Bloomberg that businesses further from the chip itself face greater risk of timing delays. Component and equipment suppliers depend on the same infrastructure spending as chipmakers, but can have less visibility into when individual projects will proceed.

That exposure is substantial across Asian markets. TSMC, Samsung Electronics and SK Hynix together represent nearly one-third of the MSCI Asia ex-Japan Index, according to Bloomberg-compiled data. Eight of the MSCI Asia-Pacific Index’s 10 best-performing companies in 2026 are component makers, each up at least 236%. Those gains leave expectations vulnerable to slower spending.

A funding warning, not an order collapse

Industry warnings give investors reasons to examine the financing. Broadcom chief executive Hock Tan has said capital would become a bigger constraint on AI growth than memory-chip shortages or manufacturing capacity. Gartner has warned that more than US$3.5 trillion in AI infrastructure spending could face impairment—a loss of value—by 2030 if investment outpaces supporting revenue.

Yet there is little evidence so far that financing strains have translated into weaker orders. The sell-off continued despite an upbeat revenue outlook from TSMC. That contrast separates a market repricing the risk of future delays from a demonstrated deterioration in the business suppliers are currently receiving.

Kunjal Gala, head of global emerging markets at Federated Hermes, remains confident that strong AI demand will sustain the sector. He told Bloomberg he was not worried about the chip sell-off. His fund is overweight South Korea and owns TSMC shares, giving that confidence a concrete investment expression.