Japan’s chip-related stocks dropped Monday amid growing concerns over Chinese startup DeepSeek potentially challenging U.S. global AI leadership, raising alarms for Asian tech firms dependent on the U.S. AI ecosystem.
The tech market reacted sharply to news that DeepSeek, a Chinese AI company, is facing internal challenges, with shares of key players like Advantest, Tokyo Electron, and Renesas Electronics declining.
Softbank Group, which owns chip designer Arm, saw its stock plummet after the Japanese firm increased its U.S. presence under CEO Masayoshi Son’s plans to invest $100 billion in the U.S. tech sector.
Experts noted that Japan’s chip stocks are likely to continue selling off as concerns grow about China’s rapid progress in chip manufacturing and whether it will affect Japan’s ambitions. Veteran investor Jesper Koll highlighted that while Japanese chipmakers have global capabilities, their ability to scale production may be limited.
DeepSeek’s free, open-source AI models, developed in just two months for under $6 million, raised eyebrows over the massive investment in AI infrastructure and data centers by major tech companies. The startup also faced U.S. restrictions on Chinese semiconductors, limiting access to advanced chips.
The falling chip stocks come as broader market concerns mounts, with Nasdaq futures dropping 1.62% during Asia trading hours. Market strategists warned of potential volatility and capital re-pricing for key companies like Nvidia, NVIDIA, and others in the semiconductor sector.
Analysts predict that Japan’s tech sector faces a challenging environment as it navigates competition from U.S.-led AI initiatives while adapting to slower global growth.
Source: https://www.cnbc.com/2025/01/27/japan-chip-stocks-fall-as-deepseeks-challenge-to-us-ai-dominance-raises-worries-for-asian-tech-firms.html