ASML, Samsung Electronics to SK Hynix: Why are semiconductor stocks under pressure in the global markets today? | Stock Market News
Global markets today: The semiconductor stocks across bourses are under severe selling pressure. In the US stock market, ASML shares tumbled by up to 8.40% during Monday's trading, while ASM International and BE Semiconductor stocks also witnessed sizeable losses. SK Hynix's share price tumbled over 7% on Monday. Amongst chipmaker stocks, NVDIA's share price led the sell-off, losing around 5%.
The VanEck Semiconductor ETF fell more than 2%, extending Friday's losses, as concerns over AI-related valuations resurfaced. Chip stocks had briefly rallied earlier in the session following Chinese memory-chip maker CXMT's blockbuster Shanghai IPO before profit-taking erased those gains. Meanwhile, WTI crude extended its decline after Washington and Tehran maintained their pause in hostilities and resumed efforts to revive diplomatic negotiations.
The trend continued in Asian markets today, especially in South Korea's KOSPI and Japan's Nikkei 225. In the South Korean market today, Samsung Electronics' share price finished over 13%, while Hanmi Semiconductor's share price crashed over 12% on Tuesday.
In the Japanese market, Kioxia Holdings' share price tanked over 18%, Advantest & Renesas shares nosedived over 10%, whereas Tokyo Electron's share price fell up to 11% during Tuesday trading.
On why semiconductor stocks are under selling pressure in the global markets today, Ponmudi R, CEO at Enrich Money, said, “Semiconductor stocks are falling in the global markets today, following reports that China has begun manufacturing its own deep ultraviolet lithography machines, raising concerns over the Dutch company's long-term competitive position.”
The Enrich Money CEO said the global markets are poised for a weaker session as renewed selling in semiconductor stocks continues to weigh on investor sentiment, overshadowing the positive impact of lower crude oil prices.
“Selling pressure in semiconductor stocks in the global markets is suggesting that concerns over elevated AI-related valuations remain a dominant theme despite the easing geopolitical backdrop,” said Ponmudi R of Enrich Money.
Pointing towards the rising concern over the profitability of the semiconductor space, Dorian Carrell, Head of Multi-asset Income at Schroders, told Reuters, “You've seen the companies paying for AI, the hyperscalers, not really participating because of concerns about the cost and the degree of leverage that needs to be taken on. And now we're seeing questions over the profitability of the semiconductor space, particularly in Asia.”
“The broader AI story has some way to go, but these kinds of (profit) growth rates are rarely sustained. We think that it's healthy that the market's questioning these things,” Dorian Carrell added.
According to the news agency Reuters, China has begun manufacturing domestically developed immersion deep ultraviolet lithography machines, a chipmaking tool long dominated by Dutch supplier ASML, The Information reported on Monday, sending ASML shares down 8.5%.
China's CXMT Corp, the world's fourth-biggest memory maker, listed and raised $8.6 billion on Monday, too, ending its debut session as China's most valuable company.
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Asit Manohar has nearly two decades of experience in the mainstream media. In this period, he has served esteemed media organisations like NDTV Profit, The Economic Times, and Zee Business. He has been working at LiveMint Digital since April 2021. During these two decades of journey in mainstream media, Asit has mainly covered external affairs, markets and personal finance. However, his earliest beats include railways, SME, MSME, and politics (Congress beat). Some of his features on political, economic, and foreign policy are documented in the parliamentary records. <br><br> While pursuing his MA (Mass Communication, Session 2004-06), Asit began his media career as a stringer at All India Radio in Varanasi. At AIR Varanasi, Asit worked with the Gyanvani, Yuvvani and Vividh Bharti teams. After working for nearly one year at AIR Varanasi, he shifted to print journalism and started working as a stringer for the HT Media Ltd, Varanasi. At HT Media Ltd in Varanasi, he covered the BHU beat. <br><br> Asit has also worked with some brokerage houses. He has worked with Religare Broking and India Infoline, where he assisted the research team in developing and executing trade strategies for intraday cash, F&O, and commodities. <br><br> Asit is a Gold Medalist in MA (Mass Communication) from BHU, Varanasi. He did his BSc. (Hons) in Mathematics from Magadh University, Bodh Gaya. Asit was a National Talent Scholarship holder during his senior secondary studies (1988-91).
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