Asian technology stocks experienced significant declines following reports that Nvidia Corp.'s next-generation AI server system has been delayed by more than 12 months, pushing the launch back to 2028. According to reports from The Hindu BusinessLine, The Business Times, GuruFocus, Investing.com, and CNBC, semiconductor analysis firm SemiAnalysis reported that Nvidia's Kyber NVL144 hit setbacks in the construction of printed circuit boards for the platform. The delay affects the Kyber NVL144 rack-scale architecture, which was designed to feature Nvidia's Rubin Ultra chips starting next year, combining 144 high-performance Nvidia chips into a single unit that operates like a giant computer. An Nvidia spokesperson swiftly refuted such claims in a brief statement emailed to Investing.com, stating 'Our roadmap is intact'. However, the research firm further alleged that Nvidia cancelled an alternative back-to-back rack design following heavy operational pushback from hyperscale cloud clients, and pointed to a downsized version of the upcoming Rubin Ultra platform with a crucial four-die configuration scrapped.
The delay report particularly impacted suppliers to Nvidia, with Japan's Ibiden Co. dropping as much as 8.4% by close after being identified as a PCB maker that counts Nvidia as its largest client. As reported by The Hindu BusinessLine, The Business Times, GuruFocus, Investing.com, and CNBC, Hong Kong-listed Kingboard Laminates Holdings Ltd. tumbled 12.6%, while South Korea's Samsung Electro-Mechanics Co. slid 8.1%. In Taipei, Elite Material Co. plunged 9.95%, Nan Ya Printed Circuit Board Corp. dropped 9.28%, Kinsus Interconnect Technology Corp. fell 8.4%, and Unimicron Technology Corp. was down 5.37%. According to Bloomberg, the selling pressure suggests investors are becoming more sensitive to any possible disruption after a powerful run in AI-linked stocks, with the broader reaction reflecting growing caution after recent volatility in global technology shares. The multilayer PCB serves as the brain essential for AI companies to train and run cutting-edge models, making the manufacturing difficulties particularly significant for the industry.
The decline occurred amid a broader global technology sell-off as investors questioned whether the AI-led rally has outpaced earnings expectations. As reported by Moneycontrol, shares of Indian artificial intelligence-linked companies fell sharply on Monday, with stocks such as Netweb Technologies, Aeroflex Industries, E2E Networks and Black Box declining by as much as 10%. The risk-off sentiment extended across Asia, where the MSCI Asia Pacific Index dropped as much as 2.2% before trimming losses to trade about 1.5% lower. According to Gary Tan, a portfolio manager at Allspring Global Investments, the weakness is driven by 'profit-taking, sector rotation and caution ahead of the US reopening after the July 4 holiday'. He also cited a possible drag from this week's mega US listing for Korean memory maker SK Hynix as contributing factors. Samsung Electro-Mechanics has surged more than 600% this year, while Kingboard Laminates is still up more than 470%, making both stocks vulnerable to profit-taking.
The AI server delay news had broader implications for financial markets, with Japan's 10-year government bond yield hitting its highest level in 30 years as reported by CNBC. According to Bloomberg, the news spread across Asian markets, with stocks including Japanese PCB maker Ibiden and Hong Kong's Kingboard Laminates Holdings falling more than 10% intraday. The semiconductor analysis firm SemiAnalysis noted that the manufacturing problem with the multilayer printed circuit board, a core component of the system, led to the launch delay. The reason is that current technology makes it difficult to mass-produce the component, a special PCB that densely connects signals between chips and parts. This development adds to unease in financial markets beyond the immediate technology sector impact, reflecting broader concerns about supply chain disruptions and manufacturing challenges in the AI infrastructure sector.
Despite Nvidia's official denial of the delay reports, the company's shares underperformed significantly on Monday, ticking up just 0.8% while the Philadelphia Semiconductor Index surged 3.2%. As reported by Investing.com, Nvidia lagged behind rivals Advanced Micro Devices Inc, which gained 7.7%, and Broadcom Inc, which jumped 4.4%. The underperformance came as a broad rally for chipmakers collided with the boutique research report alleging significant delays in Nvidia's next-generation server architectures. However, Mizuho analyst Jordan Klein dismissed such fears in his daily "Tech Bytes" note, calling the product delay stories 'more noise' and stating 'I would not be worried about NVDA nor looking to sell the stock'. He additionally pointed to strong earnings last Friday from Hon Hai Precision Industry Co Ltd, one of Nvidia's largest suppliers, noting that management forecasted continued acceleration in AI demand, which Klein said was 'a very good sign into the NVDA launch of their new Vera Rubin rack'.
