Chip Stock Carnage Seeps Into Asia With $11 Billion Lost

(Bloomberg) -- The chipmaking sector saw another bout of selling in Asia, wiping at least $11.2 billion in market , as weak forecasts from Nvidia Corp. and Applied Materials Inc. added to the latest signals that demand for servers, personal computers and mobile is falling.

• SoftBank Group Corp., whose Vision Fund owns a stake in Nvidia, and Taiwan Semiconductor Manufacturing Co. were among the the biggest drags on the MSCI Asia Pacific Index. SoftBank’s results last week included a big boost from the rally in its Nvidia stake.
• In Japan, declines were broad-based across the sector with equipment makers Tokyo Electron Ltd., Advantest Corp. and silicon wafer manufacturer Sumco Corp. bearing the brunt of the losses.

“In the short term, weaker demand, weaker end-demand is beginning to materialize,” Amir Anvarzadeh, a senior strategist at Asymmetric Advisors in Singapore, said by phone. “Expectations are still too high despite the recent declines. Whether it’s Advantest or whether it’s Disco, or whether it’s Tokyo Electron, those are the equipment guys that will see the impact, and they’re already seeing it.”

Both Nvidia and Applied Materials released weak forecasts. Nvidia was hit by a loss of demand from the collapse of cryptocurrency mining and Applied Materials’ disappointing outlook indicated the chip industry is holding off on expansion plans in the face of a murky outlook for electronics demand.

Read more: Nvidia, Applied Forecasts Add to Evidence Chip Bull Run Ending

Global chip companies have been whipsawed by worries over prices amid slowing demand. The Philadelphia Semiconductor Index, or SOX, tanked 12 percent in October for its worst monthly performance since 2010.

(Note: Calculations are based on sum of market capitalization change for select chip-sector stocks.)

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