SoftBank Falls 4.4%, Advantest Drops 10% in Tokyo Rout

SoftBank Group and Advantest led Japan's semiconductor sector sharply lower on July 28 as a deepening global chip selloff drove the Nikkei 225 down 3.95%, while Australia's ASX 200 gained 0.6% the following session.

SoftBank Group declined 4.43% to ¥5,095 and Advantest slid 10.25% as Japan's Nikkei 225 fell 3.95% to 62,364 on July 28.
The selloff reflected rising concerns over China's memory chip expansion and broker forecasts pointing to a 2027 peak in memory pricing.
Australia's ASX 200 added 0.6% to 8,948 on July 29, anchored by Rio Tinto's record interim dividend and easing domestic inflation.

Lead

Tokyo's technology sector was swept by a sharp rout on Monday, July 28, 2026, as fears over China's expanding semiconductor capabilities and softening memory price outlooks rippled through Asia-Pacific markets. SoftBank Group Corp (9984.T) closed down 4.43% at ¥5,095, while chip testing equipment maker Advantest Corp (6857.T) plunged 10.25%. Japan's benchmark Nikkei 225 fell 3.95% to 62,364.92, its steepest single-session loss in weeks, as selling pressure engulfed the entire semiconductor supply chain from wafer producers to equipment suppliers.

What Happened

The wave of selling that struck Softbank Tower—headquarters of the group whose investment portfolio is among the world's most concentrated bets on artificial intelligence—originated in the United States. The VanEck Semiconductor ETF shed more than 2% on Monday, Advanced Micro Devices fell roughly 5%, Teradyne dropped 4%, and Micron Technology shed approximately 2%, as institutional investors reassessed the durability of AI-driven chip demand.

The selloff transmitted rapidly across Asia. In Tokyo, Tokyo Electron fell more than 10%, matching Advantest's decline, while memory chip manufacturer Kioxia Holdings collapsed more than 17%. In Seoul, Samsung Electronics dropped 13.4% and SK Hynix lost more than 14.7%, dragging South Korea's Kospi down 10.84% to 6,023.66—one of the sharpest single-day declines the index has recorded.

The Driver: China's Chip Push and Memory Peak Forecasts

Two converging narratives catalysed the selloff. First, media reports detailed China's accelerating progress in domestic memory chip production and advanced lithography equipment, raising the prospect of a structural supply surge that could compress pricing power for established producers in Japan, South Korea, and Taiwan. Second, broker research circulating across the region pointed to a potential peak in global memory chip prices by 2027, prompting a broad reassessment of near-term earnings trajectories for companies across the memory and testing equipment supply chain.

For SoftBank Group, the pressure extends beyond any direct chip exposure. The conglomerate's investment thesis is substantially anchored to its stake in Arm Holdings, the chip architecture licensor positioned at the centre of the AI semiconductor ecosystem. As sentiment toward AI infrastructure spending cools, SoftBank's concentrated leverage to that theme becomes a vulnerability rather than a premium. The 4.4% decline reflects a market re-rating of AI-linked assets more broadly, not simply a single negative catalyst.

Advantest, which supplies semiconductor testing equipment to major customers including SK Hynix and Micron, faces a secondary demand risk. A plateau in memory pricing historically correlates with reduced capital expenditure by chip manufacturers, creating a downstream headwind for equipment suppliers that typically lags the primary pricing cycle by one to two quarters.

Market Reaction

The Nikkei 225's 3.95% decline erased gains accumulated earlier in the month, pulling the index back from levels above 64,000 reached in mid-July. Trading volumes across Tokyo's technology sector were elevated, with broad participation in selling from large-cap names down through mid-tier materials and equipment suppliers.

South Korea absorbed the sharpest losses. The Kospi's 10.84% drop—driven by its heavy memory-sector composition—ranked among the most severe one-day corrections in the index's recent history. Samsung Electronics, the world's largest memory chipmaker by revenue, saw tens of billions of dollars in market capitalisation erased in a single session.

Sydney Floor Holds

While Tokyo was overwhelmed, the sydney floor of the ASX 200 delivered a contrasting session on July 29. The S&P/ASX 200 added 54 points, or 0.6%, to close at 8,948—its second consecutive gain—insulated from the worst of the global chip rout by the index's heavier weighting toward resources and financials rather than technology.

Rio Tinto was the standout performer, surging approximately 4.5% after reporting first-half 2026 underlying earnings of $6.9 billion, a 43% year-on-year increase that came in 1% ahead of consensus. The mining giant lifted its interim dividend 43% to $3.4 billion, supported by a 28% rise in underlying EBITDA and a 75% jump in free cash flow—powered by strengthening copper, aluminium, and lithium markets. The result pulled other major miners higher and provided a structural counterweight to global technology weakness.

Domestic data added further support. Australia's headline CPI fell to 3.8% in the twelve months to June, down from 4.0% in May, reducing pressure on the Reserve Bank of Australia to resume rate increases and fuelling broad gains across healthcare, commercial services, and non-energy minerals.

Outlook

The divergence between Tokyo and Sydney on July 28–29 maps the fault lines now visible across Asia-Pacific markets. Indices and companies leveraged to AI semiconductor demand face acute pressure as questions mount about the cycle's durability and timing. Resource-heavy markets, by contrast, benefit from commodity strength and receding inflation. For SoftBank Group and Advantest, near-term direction will hinge on whether memory pricing stabilises and on the pace of enterprise AI capital deployment heading into the second half of 2026. Australia's ASX 200, buttressed by Rio Tinto's earnings and cooling domestic inflation, carries recovering momentum into the week, though global macro uncertainty remains a persistent overhang for the region.