A Nikkei decline on Thursday, October 22, reversed part of the previous session’s advance as semiconductor shares fell amid concerns about artificial intelligence spending in 2027. Japan’s tech-heavy benchmark was down 0.8% at 64,128.54 by 0137 GMT, while the broader Topix was largely unchanged.
Key Takeaways
- Tokyo Electron fell 4.1% and Screen Holdings dropped 6%, leading weakness in chip-related shares.
- Analysts pointed to uncertainty over 2027 AI investment and the possibility that Chinese equipment demand had been brought forward.
- Gains in cybersecurity, IT services and Sony helped limit the broader market’s losses.
Table of Contents
- Nikkei decline follows Wednesday’s gains
- AI investment outlook and China demand draw scrutiny
- Other technology shares provide support
- Conclusion
Nikkei decline follows Wednesday’s gains
The selloff was concentrated in semiconductor and AI-linked companies rather than spread evenly across Japanese equities. Tokyo Electron’s 4.1% fall made it one of the biggest drags on the Nikkei because of its heavy index weighting. Screen Holdings lost 6%, and Lasertec declined 2.7%.
Data-centre cable maker Fujikura fell 3%, while SoftBank Group, which invests in AI-focused startups, slipped 3.1%. Both the Nikkei and Topix had gained 0.9% on Wednesday.
AI investment outlook and China demand draw scrutiny
Broadly solid earnings from US chip equipment maker Lam Research did not dispel investor caution. Its shares declined in extended trading after the results, with concerns about Chinese demand adding to questions over the sustainability of AI capital expenditure.
Iwai Cosmo Securities analyst Kazuyoshi Saito said investors remained concerned that Chinese customers had accelerated semiconductor equipment purchases ahead of potential regulatory tightening. That could leave demand exposed to a later slowdown.
Nomura Securities equities strategist Wataru Akiyama said Japanese shares were also vulnerable to profit-taking after the previous session’s gains, which followed strong after-market earnings reports from SpaceX and Super Micro Computer on Tuesday.
Akiyama said investors were increasingly assessing whether spending on AI infrastructure and computing capacity could maintain its momentum in 2027.
Other technology shares provide support
Cybersecurity company Trend Micro rose 6.6% after the disclosure of critical PHP programming-language vulnerabilities prompted several European governments to take websites offline as a precaution.
IT services provider SHIFT climbed 9%, making it the Nikkei’s largest percentage gainer. IT consultancy BayCurrent advanced 5.9%, and Sony gained 2.6%.
Services led the Tokyo Stock Exchange’s 33 industry groups with a 2.2% rise, helping offset weakness in chip-related stocks.
Conclusion
The early-session retreat reflected pressure on chip and AI-linked shares, while gains elsewhere kept the Topix broadly steady. The durability of AI investment into 2027 remained a central concern.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
