nikkei slump hits semiconductor stocks as market tensions rise
Tokyo, Monday, 27 January 2025.
The Nikkei Average on the Tokyo Stock Exchange continued its downward spiral, casting a shadow over semiconductor-related stocks, including those from ASML. This decline is largely attributed to recent fluctuations in the U.S. semiconductor market, which have triggered significant shifts in international trading dynamics. ASML and other major players in the semiconductor sector are grappling with increased selling pressure amid these challenging market conditions. The ripple effects of U.S. market movements are becoming increasingly evident, impacting global stock trends and placing semiconductor giants on high alert. With U.S.-China tensions simmering and proposed tariffs by President Trump on Colombia adding to the uncertainty, the Tokyo stock market faces a tumultuous period. Investors in Japan are anxiously monitoring these developments as they weigh their impact on the broader economic landscape. The decline in semiconductor stocks reflects this heightened global market volatility.
Market decline analysis
The Nikkei Average experienced a notable decline of 232.22 points (0.58%) to 39,699.76 yen [1]. This downturn particularly affected major semiconductor companies, with firms like Advantest, Tokyo Electron, and Disco facing significant selling pressure [1]. The market’s initial positive response to the Bank of Japan’s monetary policy meeting quickly dissipated [1], while concerns over U.S. trade policies, including Trump’s proposed 25% tariff on Colombia, further dampened investor sentiment [1].
Global semiconductor dynamics
Japanese semiconductor equipment manufacturers have revised their fiscal year 2025 sales forecasts, though AI chip demand could potentially drive a 5% growth [6]. Screen, a major industry player, has announced plans to increase production capacity to 120% of 2023 levels by fiscal year 2026, targeting annual revenue of JPY600 billion [6]. The sector faces additional pressure from China’s expanding wafer foundry industry, which is projected to achieve a 16% year-on-year growth [6].
Regional market implications
The broader TOPIX index showed resilience, rising by 13.62 points (0.50%) to 2,764.66 [1]. Market expert Kan Xinyu from Nissay Asset Management noted that short-term investors likely responded to the tariff news with selling actions [1]. This market behavior occurs amid significant developments in Asia’s semiconductor landscape, where India seeks to establish complementary partnerships with Japan [2], potentially creating new opportunities for market stabilization.