Asian Chip Stocks Diverge Amid Concerns of Tighter Data-Center Regulations

By Jiahui Huang

Asian chip stocks were mixed Thursday as investors worried that Democratic control of Congress could lead to tighter regulations on data centers, while Chinese chip stocks rallied.

Following an overnight selloff in U.S. semiconductor stocks, chip shares fell sharply in Korea, Japan and Taiwan.

Shares of South Korean memory-chip giants Samsung Electronics and SK Hynix dropped 4.8% and 7.0%, respectively, after paring steeper losses earlier in the session.

Japanese chip-related stocks also declined. Tokyo Electron lost 7.6% and Kioxia Holdings fell 6.05%, while major AI investor SoftBank Group dropped 5.1%.

In Taiwan, Foxconn Technology Group, the world's largest contract electronics manufacturer, lost 0.7%, while chip designer MediaTek fell 3.2%. Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, rose 0.4%.

Democrat Gina Hinojosa's election as Texas governor has raised concerns about tighter regulations on data centers, given the state's large pipeline of planned projects, Tiger Brokers chief market strategist James Ooi said in a note. Investors may be pricing in slower construction or fewer projects, he added.

In contrast, Chinese semiconductor stocks rose broadly. AI chip maker Moore Threads gained 5.65%, while peer Shanghai Biren Technology gained 11%. Chinese contract chip maker SMIC rose 3.3% in Hong Kong.

Still, some analysts see limited risks to the AI investment boom. Data-center construction is unlikely to face major delays, limiting the potential impact on supply contracts and AI companies' earnings, Kiwoom Securities analyst Han Ji-young said in a note.

Write to Jiahui Huang at jiahui.huang@wsj.com