Chinese stocks declined on Tuesday, extending a broader technology-led selloff across Asian markets as investors reassessed stretched valuations amid concerns over rising domestic chip production and massive investments in artificial intelligence infrastructure.According to Reuters, the blue-chip CSI300 index fell 2.3% by the midday break, touching its lowest level since July 21. The Shanghai Composite Index also declined 1% to 3,820.52 points as selling pressure intensified across technology and semiconductor shares.The tech-heavy STAR 50 Index dropped 4%, while the CSI AI Index slumped 5.1% and the semiconductor index declined 3.7%. The weakness reflected growing investor caution over the sustainability of the AI-driven rally and whether current valuations are justified amid increasing competition and higher spending requirements.Shares of memory chipmaker CXMT fell 1.6% after the company surged on its market debut a day earlier to become China's most valuable listed company. Other semiconductor stocks also witnessed sharp declines, with Gigadevice hitting its 10% daily limit and Cambricon falling 6%.Reuters reported that uncertainty remained elevated as investors awaited key developments, including US policy decisions, earnings from major technology companies and signals from this week's Politburo meeting. Analysts at China Fortune Securities noted that Chinese equities could remain volatile in the near term until greater clarity emerges on these issues and a market bottom is established.The selloff in Chinese technology stocks followed similar declines in South Korea and Japan, where chip companies faced pressure as investors questioned elevated valuations linked to AI infrastructure spending and intensifying competition from China.Investor sentiment was also affected by reports that Beijing has started producing domestically developed immersion deep ultraviolet lithography machines, according to The Information. The development marks a significant step in China's efforts to reduce reliance on Dutch semiconductor equipment supplier ASML and strengthen technological self-sufficiency.Hong Kong stocks remained relatively stable as investors rotated funds into sectors with more attractive valuations. The Hang Seng Index slipped 0.1% to 25,178.21 points, while the Hang Seng Tech Index edged up 0.2%.The broader market focus remains on whether China's semiconductor expansion and AI ambitions can translate into sustainable earnings growth or whether rising capacity and competition could pressure margins across the industry.Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.