Japan’s Nikkei index ended trading slightly higher on Monday, after recovering from the losses it recorded during the first hours of the session.
The shift was supported by improved performance in a number of chip stocks, coinciding with South Korea’s announcement of massive investment plans in the semiconductor and artificial intelligence sector.
The Nikkei rose 0.15% to close at 69,468.11 points, after falling nearly 1.97% during trading.
The broader Topix index also climbed 0.47% to 3,982 points.
South Korean President Lee Jae-myung announced that Samsung Electronics and SK Hincks, the world’s largest producer of memory chips, plan to invest about $520 billion.
They collaborated with their suppliers to establish two new chip manufacturing sites in South Korea.
Analysts said the move had restored confidence in the sector’s stocks, after coming under strong pressure at the end of last week.
Strategist Kazuaki Shimada said memory chip stocks were the reason for the Nikkei’s initial decline, but they also led the recovery to the close.
At the corporate level, Kioxia fell 4.5%.
Advantest fell 1.51%. In contrast, Tokyo Electron rose 2.44%, supporting the market.
Chip stocks were impacted by the Philadelphia semiconductor index falling 5.3% in Friday’s session.
Amid investor fears that AI companies’ valuations have skyrocketed.
Nintendo, in contrast, gained 5.25%.
Sony Group rose 3.13%, despite continued pressure from higher memory chip prices.
Observers said that the markets will continue to follow the developments of the chip sector, as it is one of the most prominent drivers of global capital markets during the next phase.
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