AI sell-off deepens as chip stocks slump in market retreat – business live
Global markets saw a deepening sell-off in AI and chip-related stocks, with Asian shares in South Korea and Japan among those hit as investors reassessed the sector's rapid gains. The retreat followed a report that China has begun mass production of homegrown deep ultraviolet (DUV) chipmaking tools, which analysts said unsettled markets by suggesting China is closing the technology gap with Western semiconductor equipment makers.
Elsewhere in UK corporate news, Barclays reported a 17% rise in first-half pre-tax profit to £6.1bn, beating analyst forecasts of £5.9bn, driven by strong equities trading (up 45% to £1.26bn) and investment banking fees (up 32% to £747m), though bad-loan impairment charges rose to £1.4bn. The bank also raised its full-year income guidance and announced a £1bn share buyback alongside a larger dividend, while the TUC urged the government to raise the bank tax to help fund energy support for households.
In short
- AI and chip stocks slumped further amid a broadening market sell-off.
- China's progress on homegrown chipmaking tools reportedly spooked investors.
- Barclays' first-half profit rose 17% to £6.1bn, beating forecasts.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
China's reported advancement in domestic DUV chipmaking tools represents tangible progress towards technological self-sufficiency in a critical sector, validating concerns about supply chain vulnerability and Western technological dominance that the market may have previously underestimated. Investors are appropriately reassessing exposure to a sector whose profitability assumptions rest partly on unchallenged competitive superiority.
The case against
Whilst China's incremental progress merits continued attention, achieving parity in one manufacturing tool does not alter the substantial accumulated advantages of Western semiconductor firms in design, process maturity, customer relationships and broader ecosystem integration. The current sell-off more likely reflects routine profit-taking after a sharp rally and the natural market tendency to overcorrect sentiment, rather than a genuine deterioration in competitive positioning.
Explained simply
Global stock markets are experiencing a significant retreat in artificial intelligence and semiconductor shares. This sell-off has particularly affected Asian exchanges in South Korea and Japan, as investors who had bought these rapidly rising stocks reassess whether the gains were justified.
The retreat was triggered by news that China has begun producing its own advanced chipmaking equipment on a large scale. This unsettled investors because it suggests China is closing the technological gap with Western companies that have long dominated the global semiconductor equipment market.
The sell-off matters because semiconductor and artificial intelligence stocks have been among the strongest performing shares in recent years, so any shift in investor sentiment can affect broader financial markets. It also reflects growing competition in the global chip industry and intensifying technological tensions between China and Western nations.
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