Asia chip firms see strong AI demand; market jitters continue
SMH•Asian chip-supply-chain companies said AI demand remained strong despite investor concerns about returns on AI infrastructure spending. Tokyo Electron forecast an 87% rise in operating profit to 1.17 trillion yen and announced plans to spend up to 150 billion yen on share buybacks.
1. Demand remains strong
Foxconn Chairman Young Liu said AI was not in a bubble and demand for AI products remained clear. Tokyo Electron CFO Hiroshi Kawamoto said customer interest was very strong and that there were no signs of a slowdown.
2. Tokyo Electron forecast
Tokyo Electron forecast operating profit to jump 87% to 1.17 trillion yen ($7.41 billion), above expectations. The chipmaking-equipment supplier also said it would spend up to 150 billion yen to buy back about 25 million shares; its shares closed down 5% ahead of earnings.
3. Investor concerns persist
Concerns about whether AI infrastructure investments will generate adequate returns weighed on technology stocks in Asia, including SK Hynix, TSMC and Advantest. SK Hynix said this week it would return about $75 billion to shareholders as higher memory prices boost profits.
