China AI Rout Erases $480 Billion as Applied Raises Besi Stake

Two signals show AI hardware investors separating market momentum from strategic control.

📊 China AI shares lose $480 billion

Decoded: Mainland China’s STAR 50 index of AI and semiconductor leaders has fallen 40% in less than four months, erasing about $480 billion in market value, Reuters reported on Oct. 26. The decline shows that domestic AI exposure has already undergone a sharp valuation reset even as global markets continue debating the durability of the investment cycle.

Why it matters: A drawdown of that scale can tighten equity financing for chip and AI companies and force investors to distinguish operating progress from policy-driven expectations. It also makes China a live test of how quickly enthusiasm can reverse when valuations outrun near-term earnings.

🗄️ Applied Materials raises its Besi stake to about 20%

Decoded: Applied Materials (AMAT) increased its strategic ownership of BE Semiconductor Industries (BESIY) to approximately 20% of outstanding shares, Besi said on Oct. 27. Applied described the holding as long term, does not intend to seek a board seat and has no current plan to buy more shares. The companies have collaborated since 2020 on hybrid-bonding production systems and recently expanded work on 3D chip integration.

Why it matters: The larger stake gives Applied deeper economic exposure to advanced packaging without an outright acquisition or board control. Hybrid bonding is becoming more important as AI systems rely on tighter integration of logic and memory, making assembly equipment a strategic layer of the semiconductor stack.

Stay decoded. See you tomorrow.

— The Get AI Decoded Team