TOKYO/TAIPEI Oct 30 (Reuters) – Asian chip-supply-chain companies said on Friday that AI-related demand remained strong, while investor concerns persisted over whether the massive investments in AI infrastructure would generate adequate returns.
Foxconn Chairman Young Liu told reporters at a company event that AI was not in a bubble and demand for AI products remained clear. The contract electronics maker is Nvidia’s biggest AI server maker and Apple’s top iPhone assembler.
Alphabet, Intel and Amazon all fell overnight due to market concerns over whether returns will justify continued high capital expenditure. The caution spread to Asia on Friday, with technology stocks, including South Korea’s SK Hynix, Taiwan’s TSMC and Japan’s Advantest, coming under pressure.
“In the various conversations we are having with our customers, interest is very strong,” Tokyo Electron Chief Financial Officer Hiroshi Kawamoto told reporters at a briefing about the company’s half-yearly results.
The company, on Friday, forecast a stronger-than-expected 87% jump in operating profit to 1.17 trillion yen ($7.41 billion), underscoring robust demand for chipmaking equipment.
“At present, there are no signs that this is slowing down,” he said.
Despite concerns about AI-related spending, Asian suppliers of chips and semiconductor equipment continue to report strong results. SK Hynix said this week it would return about $75 billion to shareholders as higher memory prices boost profits.
Demand growth for AI will certainly continue although the rate may vary, said Rick Tsai, CEO of Taiwan chip designer MediaTek.
“Doubts over the Anthropic IPO, AI financing and wider AI adoption are holding back investors,” said David Gibson of MST Financial.
“It will take time to fix this week’s selloff.”
Tokyo Electron, a major supplier of equipment for processes such as deposition and etching to chipmakers, said it would spend up to 150 billion yen to buy back some 25 million shares. Its shares closed down 5% ahead of earnings.
($1 = 157.8500 yen)
(Reporting by Sam Nussey, Anton Bridge, Wen-Yee Lee, Eduardo Baptista and Ben Blanchard; Editing by Subhranshu Sahu and Janane Venkatraman)
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