Asian chip supply chain companies said on Friday that demand linked to artificial intelligence remains strong, even as investors grow more uneasy about whether the massive sums being poured into AI infrastructure will deliver adequate returns. The comments, reported by Reuters from Tokyo and Taipei on October 30, amount to a coordinated defense of the AI buildout from the companies that supply its servers, memory and manufacturing equipment.
Foxconn Chairman Young Liu told reporters at a company event that AI was not in a bubble and that demand for AI products remained clear. Foxconn is Nvidia's biggest AI server maker and Apple's top iPhone assembler, which puts it close to both sides of the trade: the data center hardware driving the spending wave and the consumer devices investors worry could be squeezed by higher component prices.
The sharpest evidence came from Tokyo Electron, a major supplier of deposition and etching equipment to chipmakers. The company forecast a stronger-than-expected 87 percent jump in operating profit to 1.17 trillion yen, about 7.41 billion dollars, underscoring how robust orders for chipmaking tools remain. Chief Financial Officer Hiroshi Kawamoto told reporters at a briefing on the company's half-year results that, in its conversations with customers, interest is very strong. "At present, there are no signs that this is slowing down," he said. Tokyo Electron also said it would spend up to 150 billion yen to buy back some 25 million shares, even though its own shares closed down 5 percent ahead of the earnings announcement.
Memory makers told a similar story, helped by rising prices. SK Hynix said this week it would return about 75 billion dollars to shareholders as higher memory prices boost profits. In Japan, memory maker Kioxia announced an interim dividend of 90 yen per share, with excess cash to be used for shareholder returns from the second half of the fiscal year onward. Kioxia forecasts non-GAAP operating profit of 2 trillion yen for the third quarter, although its shares have slid heavily from a peak in June. In China, CXMT said it swung to a net profit for the quarter due to higher memory prices; the chipmaker became China's most valuable listed company in July after its shares surged by more than five times in their Shanghai debut.
Taiwan chip designer MediaTek struck a measured version of the same note. Chief Executive Rick Tsai said demand growth for AI will certainly continue, although the rate may vary.
The market backdrop explains why suppliers felt the need to speak up. Alphabet, Intel and Amazon all fell overnight as investors questioned whether returns will justify continued high capital expenditure, and the caution spread to Asia on Friday, putting technology stocks including SK Hynix, TSMC and Advantest under pressure. David Gibson of MST Financial said doubts over the Anthropic IPO, AI financing and wider AI adoption are holding back investors, and that it will take time to fix this week's selloff.
For enterprise buyers, the takeaway is the gap between the two signals. Share prices are pricing in doubt about payback, while the supply chain's order books, profit forecasts and shareholder returns still reflect scarcity and strong demand for AI capacity. Until orders themselves soften, suppliers say, the buildout has not slowed.