The semiconductor and chipmaker rout has deepened on Tuesday, with major American players like Micron Technology Inc., Nvidia Corp., Advanced Micro Devices Inc., Sandisk Corp., and ASML Holding N.V. falling up to 10% at open.
Traders have been dumping chip stocks ever since China announced that it has begun manufacturing its own immersion deep ultraviolet (DUV) lithography machines. The breakthrough directly impacts Dutch firm ASML's near-monopoly over critical chipmaking technology. ASML's stock traded 5% lower at $1,566.35.
Memory giant Sandisk was hit the hardest, and dived 11.5% to a low of $1,128.36 within minutes of the Wall Street opening bell. Micron plunged over 8.6% to a low of $817.02, AMD traded 8.2% lower at $452.54.
Intel Corp slid over 6% to a low of $85.75, Qualcomm Inc. was down 4% to $164.10. Nvidia Corp. was somewhat insulated compared to other semi peers, but still fell 2% to $193.57.
American Depository Receipts (ADRs) of newly-listed Korean giant SK Hynix fell 9% to $130.54. The ADRs have fallen nearly 24% in just the last 5 days.
China's jolt came at an already volatile time for AI-linked semiconductor companies and chipmakers, with investors engaging in frequent selloffs over concerns regarding sky-high valuations, AI revenue.
China Threat: Explained
Chipmaking relies on lithography machines that use precisely focused light to etch microscopic circuits onto silicon wafers. Therefore, China's announcement triggered a sharp selloff of semis across global chip equipment stocks with ASML shares sinking more than 7% on Monday — its worst day since June 8.
The finer the etching, the more powerful the chip. ASML has long dominated the most advanced versions of this technology, making it an unavoidable chokepoint for global chipmakers.
Who Is China's Manufacturer?
The manufacturer remains unnamed, given the sensitivity of the matter, people familiar with the development told Reuters. Machines are expected to reach major chipmakers this year, including SMIC, Hua Hong Semiconductor and ChangXin Memory Technologies. Output will start small — about five units this year, rising to roughly 20 by 2027.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
