China shares slip to one-week low as chip, AI stocks lead Asia tech rout

HONG KONG: China stocks slipped to a one-week low on Tuesday, joining a broader tech-led selloff across Asia, as investors reassessed lofty valuations on concerns over increased Chinese chip production and heavy spending on AI infrastructure.  

By the midday break, China’s blue-chip CSI300 index was down 2.3% at its lowest level since July 21. The Shanghai Composite index was down 1% at 3,820.52 points.

The tech-heavy STAR 50 Index dropped 4%, the CSI AI Index slid 5.1%, and the semiconductor index fell 3.7%.

Shares of memory chipmaker CXMT lost 1.6%, a day after surging in its debut to become China’s most valuable-listed company.

Other chip stocks also declined, with Gigadevice hitting its 10% daily limit and Cambricon falling 6%.

Uncertainty remains high at home and abroad as investors await US policy decisions, big tech earnings and signals from the Politburo meeting due this week, analysts at China Fortune Securities wrote in a note.

“A-shares are likely to remain volatile in the near term until there are more clarity in these key issues and a market bottom emerges.” Chip stocks in South Korea and Japan took a heavier snub as investors questioned lofty valuations on concerns over AI infrastructure financing and intensifying competition from China.

Beijing has begun manufacturing domestically developed immersion deep ultraviolet lithography machines, The Information reported on Monday, in a major push to break dominance by Dutch supplier ASML and towards tech self-efficiency.

“China will very soon be supplying the world with high-quality memory chips at lower prices,” Fan Liwen, a portfolio manager at Shenzhen New Thinking Investment Management Co said.

Hong Kong stocks were largely steady as money continued to rotate and seek shelter in cheaper valued sectors.

The Hang Seng Index was down 0.1% at 25,178.21, and the Hang Seng Tech Index edged 0.2% higher. ‑Reuters