Chips Selloff Deepens Amid AI Angst | The Asia Trade 7/17/2026

SpaceX Operational and Market Status - SpaceX Starship test flight 13 was scrubbed due to anomalous telemetry detected by autonomous systems, necessitating hardware tweaks and engine replacements [4][7][12][138] - Starship is critical for the future of SpaceX, as it is the only system capable of carrying the necessary metric tonnage to orbit for data centers and Starlink V3 satellites [8][10][16] - Starlink has achieved over $1 billion in organic revenue, growing from approximately 150 employees to nearly 3,000 [13][14] - SpaceX shares declined 4% following the test flight scrub, reflecting investor sensitivity to the company's reliance on Starship's success as a public entity [7][8][30] AI Industry and Market Trends - Global AI capital expenditure remains robust, though investors are increasingly scrutinizing the return on investment and the sustainability of massive spending by hyperscalers [25][27][36] - Semiconductor stocks face a broad-based selloff as market participants question whether profit expectations for the AI boom are realistic, despite strong earnings from companies like TSMC and ASML [26][27][34] - Chinese AI companies are pivoting toward generative AI, with firms like SenseTime reporting that generative AI now accounts for a significant portion of their business, growing at a 50% to 60% annual pace [90][91] - The World AI Conference in Shanghai highlights China's strategic focus on AI, with the government advocating for open-source models and global accessibility to bridge the divide between advanced nations and the Global South [82][87][89] Macroeconomic and Geopolitical Factors - U.S. and Iran hostilities have led to a five-day streak of strikes, impacting shipping in the Strait of Hormuz, which accounts for 20% to 25% of the world's oil supply [42][103][140] - South Korean regulators are implementing measures to curb leverage in the market, including halting new listings of leveraged ETFs, to mitigate volatility impacts on major stocks like Samsung and SK Hynix [23][39][40]