The valuation of the US semiconductor and AI sectors has rebounded, causing a sell-off in the Asian market

The valuation correction of the US semiconductor and AI sectors has affected the Asian market, and on July 17th, there was a large-scale sell-off in the Japanese and Asian technology supply chains. The Philadelphia Semiconductor Index fell 4.3% on July 16th. TSMC's net profit for the second quarter increased by 77.4% year-on-year, and its full year capital expenditure guidance was raised from $52 billion to $56 billion to $60 billion to $64 billion, but its ADR fell by 2.3%. Bloomberg macro strategists stated that the decline in the US market has led to the liquidation of leveraged stock funds, resulting in large-scale quantitative outflows of funds from Japanese technology stocks such as Kioxia, Tokyo Electron, Advantest, and SoftBank. Geopolitical tensions, pressure on commodity valuations, and concerns about inflation and high interest rates increase the downside risk for high premium growth technology stocks.