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Chip Stocks Plunge as US Seeks Equity Stake in Intel
20 Aug
Summary
- Nikkei 225 Index down 1.5%, Topix falls 0.6%
- SoftBank Group plunges 7.1%, Advantest loses 5.7%
- US wants equity stake in Intel in exchange for cash grants
On August 20th, 2025, Japan's Nikkei share average continued its downward slide, falling 1.5% to 42,888.55 at the close. The broader Topix gauge also declined by 0.6%. The losses were primarily driven by chip-related companies, with SoftBank Group plunging 7.1% and Advantest, a maker of chip-testing equipment, losing 5.7%.
The sell-off in Japanese semiconductor stocks followed a similar trend in the US, where the tech-heavy Nasdaq sank overnight, with Nvidia sliding 3.5% - the biggest drop in nearly four months. This was further exacerbated by news that the US government wants an equity stake in Intel in exchange for cash grants approved during the previous administration.
The potential government intervention in the semiconductor sector has raised concerns that it could weigh on US high-tech stocks and, by extension, Japanese semiconductor-related shares. Additionally, the US and Japan are reportedly just "weeks away" from finalizing trade agreements, which could also be a factor in the market's volatility.
Despite the recent record highs, the Nikkei is expected to ease off towards the end of the year, with analysts forecasting the index to slip back to 42,000 by the end of December.
