Semiconductor stocks across Asia and the United States tumbled after chip equipment maker ASML lowered its annual sales forecast due to weaker demand for non-AI chips.
ASML, a key supplier to major chipmakers, reported a significant drop in bookings and indicated that recovery in chip demand outside the artificial intelligence sector is slower than expected. Shares of ASML fell 16 percent after the Dutch company published its results ahead of schedule, citing an apparent error.
Global chip giants felt the ripple effect. AI chip leader Nvidia, which had briefly surpassed Apple as the world’s most valuable company the previous day, saw its shares drop 4.5 percent, erasing about $158 billion from its market capitalization. This widened the gap with Apple’s value of $3.56 trillion.
Other semiconductor firms, including AMD, Intel, Arm, Broadcom, and Micron, saw their shares decline between 3.2 percent and 5 percent by Tuesday’s close. The downturn dragged the Philadelphia SE Semiconductor Index down nearly 5 percent, weighing heavily on the Nasdaq index.
Asian chipmakers, many of which are customers of ASML, also experienced losses. Taiwan Semiconductor Manufacturing Co. (TSMC) shares fell 2.3 percent, Samsung Electronics dropped 2.5 percent, and SK Hynix decreased by 2.2 percent on Wednesday.
Spurred by blockbuster demand for chips during the pandemic, chipmakers raced to build extra capacity. However, as supply chains stabilized, growth leveled off, leading companies to postpone orders for new equipment until factories reach full capacity.
Despite robust demand for AI-related chips, ASML reported that other segments of the semiconductor market remain weaker than anticipated. Logic chip manufacturers are delaying orders, and memory chip makers are planning only “limited” capacity expansions.
Analysts suggest that ASML’s forecast serves as a lagging indicator of industry trends that have been unfolding for months. The slowdown underscores the challenges facing the semiconductor industry as it adjusts to post-pandemic market dynamics.
Earlier this month, Samsung Electronics warned that its third-quarter profit would fall short of market expectations due to difficulties in capitalizing on AI chip demand. In contrast, TSMC, which counts AI leader Nvidia among its major customers, is expected to report a 40 percent increase in third-quarter profit on Thursday.
Industry experts will be closely monitoring upcoming earnings reports and forecasts for signs of recovery in the broader semiconductor market.
Reference(s):
cgtn.com
