Asia tech stocks extend sell-off with SoftBank down over 7% as investors sour on AI-linked names

Asian tech stocks extended their sell-off Monday, as investors sour on global AI-linked plays with the U.S. tech-heavy Nasdaq declining more than 4.5% last week.

Memory chip behemoths and heavyweights on South Korea's Kospi Index Samsung Electronics and SK Hynix fell 5% and 2%, respectively. The Kospi plunged as much as 8% as the two companies make up over 40% of the index.

Taiwan Semiconductor Manufacturing Co, or TSMC, was down 2.1%, while Hon Hai Precision, also known as Foxconn, fell 5.1%.

Japanese tech investor Softbank Group plunged 7.5%, while Tokyo Electron and Advantest were down 6.7% and 5%, respectively.

The share price declines follow a recent rally in Asia tech stocks that was supported by investor optimism on AI demand. Last month, Samsung Electronics and SK Hynix each crossed a $1 trillion market valuation, while SoftBank recently became the most valuable company in Japan.

The sell-off in tech names was triggered after Broadcom's revenue for fiscal second quarter missed market estimates last week, plunging its shares and causing a cascading impact on the tech sector.

The VanEck Semiconductor ETF (SMH) lost over 9% Friday; Softbank's British chip firm Arm Holdings had dropped nearly 13%, while Micron Technology declined more than 13%.

"The tech-led rout erased approximately $1.8 trillion in S&P 500 market cap," according to a UOB note on June 8.

UOB, however, said that tech and software companies will remain in focus with "the debut of a space exploration/AI/tech company on the Nasdaq on Fri (12 Jun), in what may be the largest IPO ever."

Broader Asia markets were also lower Monday, as a fresh escalation in Iran war signals that the conflict is far from over.