The core catalyst that led to a second major sell-off in Japanese and Asia-Pacific technology stocks on the morning of July 17th stemmed directly from the overnight "cliff-like valuation plunge" in high-flying US semiconductor giants and AI concept stocks:
1. The Philadelphia Semiconductor Index (SSE) plummeted over 4% overnight, with TSMC's increased capital expenditure triggering "ROI panic":
On July 16th, the Philadelphia Semiconductor Index fell 4.3%, marking its second consecutive day of weakness. TSMC's second-quarter net profit increased by 77.4% year-on-year, a record high, and it raised its full-year capital expenditure guidance from $52-56 billion to $60-64 billion, but its ADR still fell 2.3%. This wasn't due to a decline in performance, but rather the market beginning to re-evaluate whether the continuously expanding investment in AI computing power could translate into sufficiently rapid cash flow and profit returns. Previously, the SSE had already risen nearly 70% in six months; when valuations were based on "perfect growth," exceeding expectations was no longer sufficient to further push up stock prices.
2. Leveraged ETF Long Positions Collapse, Japanese Semiconductor Equipment Leaders Suffer Indiscriminate Capital Drain: Bloomberg macro strategists point out that the excessive decline in semiconductor giants has triggered forced liquidation and a stampede of long positions in US leveraged ETFs. As assets with extremely high beta characteristics in the global AI hardware chain, Japanese tech giants (such as Kioxia, Tokyo Electron, Advantest, and SoftBank Group) once again faced extremely severe pressure from global quantitative long positions withdrawing after the Asian market opened on July 17.
3. Geopolitical and Commodity Valuation Squeeze: Geopolitical conflicts and high interest rates remain the backdrop for valuation suppression, rekindling market concerns about rising long-term inflation and the prolonged maintenance of high interest rates by central banks, delivering a double blow to high-priced, overvalued technology growth stocks.
