Chipmakers such as SanDisk, SK Hynix, Intel, Micron, AMD extended selloff in early trade on Tuesday, October 13 following China's memory push and doubts over AI linked spending.
Of these stocks, Micron slipped the most, falling 5.55% to $934.16, followed by SK Hynix, down 5.32% at $153.6, while Sandisk was trading 4.29% lower at $1,423.56. AMD dropped 3.35% to $ 574.31, while Intel shares slipped 2.53% to $98.79.
Wall Street opened mixed today as the Dow Jones Industrial Average gained, whilee S&P 500 and Nasdaq Composite were in losses as investors evaluated earnings from major US bank, while selloff in memory stocks continued
The Dow Jones Industrial Average rose 368.77 points, or 0.71%, to 52,219.32 in early trading at 9:33 a.m. EDT. The S&P 500 slipped 4.54 points, or 0.06%, to 7,802.70, while the Nasdaq Composite fell 105.575 points, or 0.39%, to 27,140.327, according to real-time index quotes.
The pressure on chip stocks continue after China's memory chipmaker CXMT announced significant progress on a new, high-density chip structure, ramping up competitive pressure. Other factors include the wider selloff of South Korean AI stocks such as SK Hynix and Samsung Electronics. This comes amid rising concern regarding the return on investment from AI aftter massive infrastructure spending by companies in the sector.
Amid continued chip selloff, Asian market also witnessed pressure, with South Korea's Kospi fell 6.5% or nearly 400 points to 6,001.81, Japanese index Nikkei's return after a holiday on a negative footing as it slumped nearly 3% to a low of 5,988.22, Australia's S&P/ASX 200 was down 0.38% to 8,749.40, Hong Kong's Hang Seng Exchange opened 0.8% lower at 24,072.28. Semiconductor giants SK Hynix and Samsung Electronics Co. Ltd. declined 9% and 8% to 1,464,000 South Korean Won and 231,750 South Korean Won, respectively. SK Hynix's Chinese rival CXMT earlier announced that it made progress on a memory-chip design capable of storing more data.
On a broader context, the sector witnessed sell-off as worries continue about how long the AI trade can run. Investors are reassess whether the pace of investment in the technology can be sustained against a backdrop of mounting safety concerns and signs of funding strain. Providing a counterweight is optimism that strong earnings will continue to support the broader market
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