Chip Stocks End Worst Stretch in 16 Months as Memory Fears Split the Sector
NEW YORK — Semiconductor stocks just closed out their worst stretch in 16 months, and Tuesday’s session showed a market learning to separate two different fears.
The iShares Semiconductor ETF fell for a sixth straight trading day, its longest losing streak since May 2025, MarketWatch reported, citing Dow Jones Market Data. Twenty-two of the 30 stocks in the PHLX Semiconductor Index now sit more than 20 percent below their record highs, most of them set in May or June.
But the headline masked a split. The PHLX index itself lost only 0.23 percent on the day. Micron Technology, the epicenter of the selling, dropped as much as 5.8 percent at the open before buyers stepped in and cut the loss to 3.6 percent. Nvidia, Broadcom, Intel and Qualcomm all finished higher, up between 0.7 and 1.4 percent.
The pain concentrated in memory. Two triggers hit in 48 hours. China’s ChangXin Memory Technologies said it made key progress on a denser 4F² DRAM design and plans a server memory product by the end of 2026, raising fears of intensified competition. Then Broadcom chief executive Hock Tan said at a Singapore event that many AI investors have no clue what they are investing in, likening some of the money flowing into the sector to casino gambling.
Seoul took the worst of it. SK Hynix fell 10.1 percent and Samsung 7.4 percent on Tuesday, dragging the Kospi down 5.5 percent and triggering a sell-side sidecar, a volatility curb unused in two months. SK Hynix has now fallen for seven straight sessions, losing nearly a fifth of its value.
The market’s verdict so far is selective. Memory makers and equipment suppliers like Applied Materials, which fell 7 percent Tuesday as the S&P 500’s worst performer, are being priced for a tougher 2027. AI compute names are being treated as a separate trade, one where demand still looks intact.
Skeptics of the selloff note what is missing. CXMT has disclosed no specifications, yield rates or customer approvals for its new design, and it holds about 10 percent of global DRAM revenue, according to Counterpoint Research. Micron, meanwhile, just posted its sixth straight record quarter, guided the next one higher and trades at about six times forward earnings.
What snaps the streak is the open question. Jefferies notes investors are watching Anthropic’s investor day, reportedly set for Wednesday, for signs of artificial intelligence demand. The consumer price index lands the same morning, with Bank of America and Morgan Stanley reporting earnings.
For now, the sector’s message is that this is a correction with a thesis, not a panic without one. Whether that thesis survives contact with earnings season is the next test.
