S&P Stress Tests Find Asia-Pacific Chip Foundries More Resilient to AI Spending Slowdown Than Regional Tech Peers

According to S&P Global Ratings, semiconductor foundries in the Asia-Pacific region are more resilient to a potential decline in artificial intelligence investments compared to other technology hardware companies in the area. In a report released on Thursday, the agency conducted stress tests on four major sectors in Asia-Pacific: foundries, memory producers, cooling component manufacturers, and original design manufacturers that build servers. They evaluated these sectors against two adverse scenarios related to the AI surge. The first scenario considered a reduction in capital expenditures by leading hyperscalers such as Amazon and Microsoft, while the second involved delays in AI initiatives due to issues like power grid limitations and land shortages. The stress tests indicate that contract chipmakers like TSMC are well-equipped to handle spending cuts from hyperscalers. These insights emerge amid growing concerns about decreasing expenditures from Big Tech and discussions about moderating the pace of frontier AI development.