Shares of semiconductor companies in the U.S. and Asia experienced significant declines on Tuesday following a downward revision of annual sales forecasts by ASML, a leading chip equipment manufacturer. The forecast cut was driven by weakened demand for non-AI chips, compounded by reports that the Biden administration is contemplating restrictions on the export of advanced artificial intelligence processors to certain countries.
Nvidia, the dominant player in the AI chip market, saw its stock tumble by 4.5%, erasing approximately $158 billion from its market capitalization and widening its gap with Apple, which stands at a valuation of $3.56 trillion. Other major chip manufacturers, including AMD, Intel, Arm, Broadcom, and Micron, experienced declines ranging from 3.2% to 5%, contributing to a nearly 5% drop in the Philadelphia Semiconductor Index and weighing heavily on the Nasdaq Composite.
U.S.-listed shares of ASML plummeted 16% after the Dutch company unexpectedly published results indicating weak bookings and a reduced forecast. The report highlighted a slower-than-anticipated recovery in chip demand, particularly outside the AI sector. Despite the surge in AI chip demand, ASML noted that other areas of the semiconductor market are still lagging, with logic chip manufacturers delaying orders and memory chip producers planning only “limited” expansions.
Derren Nathan, head of equity research at Hargreaves Lansdown, remarked, “ASML’s accidental early release isn’t a concern in itself, but the content of the report does not inspire confidence among investors.”
Asian chipmakers also felt the impact, with shares of Taiwan Semiconductor Manufacturing Co down 1.9%, Samsung Electronics dropping 2.1%, and SK Hynix declining 2.5%. Samsung had previously warned that its third-quarter profits would fall short of market expectations as it struggled to meet the growing demand for AI chips. In contrast, TSMC, a key supplier for Nvidia, is projected to announce a 40% increase in its third-quarter profits later this week.
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