Asian Semiconductor Stocks Plunge as US Midterms Spark AI Regulation Fears
Asian semiconductor stocks tumbled amid concerns that a Democratic-controlled US Congress could impose stricter regulations on artificial intelligence and data centers. Meanwhile, oil prices continued to decline and Nasdaq futures retreated 1% following recent US midterm election results.
Asian semiconductor stocks plunged sharply as investors assessed the potential impact of a Democratic congressional majority following the US midterm elections, raising concerns over stricter regulations on data center development and artificial intelligence infrastructure. In Tokyo, the benchmark index declined by 1.4%, with major equipment makers leading the losses. Advantest tumbled 11.7%, Lasertec dropped 11.8%, Tokyo Electron retreated 9.9%, and Renesas Electronics fell 6.4%. Technology investment conglomerate SoftBank Group also suffered, dropping over 6%.
South Korean chipmakers faced intense selling pressure as well. Memory giant SK Hynix plunged 9%, while Samsung Electronics decreased by 6.7%. Market participants worry that tougher regulatory oversight from a Democratic-controlled Congress could dampen global demand for AI-related hardware and data center expansions. Meanwhile, the Hong Kong market moved against the regional trend, rising by 3%.
In commodity and futures markets, oil prices continued to slide. WTI crude dropped 1.6% to $86.67 per barrel, while Brent crude traded down to $93.61 per barrel. Nasdaq futures also pointed downward, declining by 1%. These movements follow a volatile trading session in the US, where the Dow Jones surged 3% in its strongest day since April 2025, and oil prices previously plummeted by 8%.
The political shift follows the US midterm elections, where Vice President Vance attributed Republican losses to the ongoing conflict with Iran. Reports also indicated that President Donald Trump is considering dismissing Defense Secretary Pete Hegseth. Following the election results, the Nasdaq climbed 1.4% and the S&P 500 gained 1.6%, driven by major tech rallies including Microsoft surging 6.7%, Amazon rising 6.1%, and Apple advancing 5.3%.
Additional market reactions included declines in Texas, where the Democratic gubernatorial candidate—known for supporting strict regulatory policies—won the election. Texas hosts the headquarters of Tesla and SpaceX, which saw their shares drop by 3.3% and 3.8% respectively. In addition, Amdocs shares plummeted 30% following a disappointing corporate outlook.
