Japan’s Nikkei 225 fell as much as 4.4% on Friday, July 17, prompting a technical sell-off in Asia. Investors lost stocks tied to smart technology. The index reached 63,896.48, extending losses from earlier in the week.
Chip equipment maker Advantest and tech investor SoftBank each lost about nine percent. Taiwan’s Taiex lost four percent while TSMC returned more than three percent, despite posting a record quarterly profit. However, the big story for Japanese stocks is Kioxia
The change in Kioxia
Kioxia, the memory maker fell by nearly 16% on Friday alone. This extends the slide that has removed 44% of its value in one month.
A rally of more than 600% since January pushed Kioxia briefly past Toyota for the position The most valuable company in Japan in the middle of June. It has since dropped to fourth place. The slide has cost about ¥30 trillion, or $185 billion, in market value.
Daiwa Securities chief analyst Yugo Tsuboi he said the chip sector remains sensitive to boom-bust trends.
“The chip part is vulnerable to the silicon cycle, and we’ve seen this a few times.”
Tsuboi pointed to increased scrutiny of Chinese chipmakers as one factor. He also saw signs that global memory prices may be stable, making further upgrades difficult to justify.
Cracks Under the Rally
Other factors are adding to the stress Kioxia has faced in the short term. Last week, Bain Capital exited all its place in the chipmaker’s memory. Many investors saw this as a sign that the chip cycle is getting stronger. Japanese stockists also have heavy duty positions, which leave the stock exposed if sales are brisk.
Kioxia was only listed in 2024. Since then, its shares have been the top performer on the MSCI World Index before the change this month.
Even if it falls, Experts are still predicting an average return of 118% for Kioxia over the next 12 months. The revision of the Topix index for October should also attract new investment into stocks.
Warning for Wider AI Trade
Kioxia’s change reflects the recovery of prices across the region. A Wall Street number of chip stocks it fell sharply on Thursday as concerns over TSMC’s AI spending overshadowed earnings sentiment.
Businesses have become skeptical of AI marketing in recent months. They are moving away from the chip names that matter most and into the areas that are left behind. This article follows the same pattern as Japan’s biggest AI sales at the beginning of this month.
The Nikkei has lost billions of yen in value in three weeks.
A note Like Nikkei Bleeds, Kioxia’s Boom-to-Bust Shows Dangers of AI Cycle appeared for the first time BeInCrypto.
