Asian Chipmakers Defend AI Growth Outlook Amid Investor Concerns Over Returns
AI demand remains strong across Asia’s semiconductor supply chain despite investor concerns over infrastructure spending.
Asian semiconductor and technology companies say demand linked to artificial intelligence (AI) remains strong. However, investors remain concerned about whether massive investments in AI infrastructure will generate sufficient returns.
Foxconn Chairman Young Liu rejected suggestions that AI was in a bubble. Speaking to reporters at a company event on Friday, he said demand for AI products remained clear.
Foxconn is a major supplier to the technology industry. It manufactures AI servers for Nvidia and assembles iPhones for Apple.
AI Investment Concerns Pressure Technology Stocks
Investor concerns intensified after shares of Alphabet, Intel and Amazon fell overnight. Market participants questioned whether returns would justify continued heavy capital expenditure on AI infrastructure.
The caution spread to Asian markets on Friday. Technology stocks, including South Korea’s SK Hynix, Taiwan Semiconductor Manufacturing Company (TSMC) and Japan’s Advantest, came under pressure.
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However, executives across the semiconductor supply chain continued to report strong customer demand.
“In the various conversations we are having with our customers, interest is very strong,” Tokyo Electron Chief Financial Officer Hiroshi Kawamoto told reporters.
Tokyo Electron Forecasts Strong Profit Growth
Tokyo Electron forecast an 87% increase in operating profit to 1.17 trillion yen, or approximately $7.41 billion.
The forecast exceeded market expectations and highlighted continued demand for equipment used in semiconductor manufacturing.
The company supplies equipment for processes such as deposition and etching.
“At present, there are no signs that this is slowing down,” Kawamoto said.
Tokyo Electron also announced plans to spend up to 150 billion yen on a share buyback. The programme will cover approximately 25 million shares.
Its stock closed 5% lower ahead of the earnings announcement.
Memory Chipmakers Announce Shareholder Returns
Strong memory prices have also supported profits across the semiconductor industry.
South Korean chipmaker SK Hynix said this week it would return approximately $75 billion to shareholders as higher memory prices boosted earnings.
Japanese memory chipmaker Kioxia announced an interim dividend of 90 yen per share on Friday. It also plans to use excess cash for shareholder returns from the second half of its fiscal year.
Kioxia forecast non-GAAP operating profit of 2 trillion yen for the third quarter. However, its shares have fallen sharply from their peak in June.
MediaTek CEO Expects AI Demand to Continue
MediaTek Chief Executive Rick Tsai said AI demand would continue growing, although its pace could vary.
His comments reflected the broader outlook among Asian semiconductor suppliers. Many companies continue to see strong demand despite investor concerns about the scale of AI-related spending.
David Gibson of MST Financial said doubts over a possible Anthropic initial public offering, AI financing and wider adoption were weighing on investors.
He added that markets would need time to recover from the week’s selloff.
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China’s ChangXin Memory Technologies (CXMT) also reported a turnaround, moving into net profit during the quarter as memory prices increased.
The company became China’s most valuable listed company in July after its shares surged more than fivefold during their Shanghai debut, according to the report.
The latest developments highlight a divide between industry demand and investor sentiment. Semiconductor suppliers continue to report strong interest in AI-related products, while markets remain focused on the long-term returns from infrastructure spending.
