Chip stocks lose $1T as AI boom sentiment falters

The chip sector experienced a sharp downturn this week as more than $1 trillion（約160兆円） in market value evaporated from the world's most valuable semiconductor companies. Nvidia led the decline with a $238 billion（約38兆円） rout since market close on Friday. Memory chipmakers SK Hynix, Samsung Electronics, and Micron lost $176 billion（約28兆円）, $173 billion（約28兆円）, and $113 billion（約18兆円）, respectively, while AMD shed $110 billion（約18兆円） and Taiwan Semiconductor Manufacturing Co. fell $119 billion（約19兆円）. In aggregate, 20 of the world's most valuable chip stocks lost $1.3 trillion（約210兆円） since Friday market close, according to a CNBC analysis using FactSet data.

The selloff comes after the chip sector has been a primary driver of market gains during the AI boom. The Philadelphia semiconductor index (SOX), which tracks 30 large U.S.-traded companies in the chip sector, has risen 92% over the past 12 months as investors rushed to capitalize on what they expected to be massive AI infrastructure spending. However, the index has fallen nearly 20% over the past month, signaling a sharp reversal in momentum. Analysts attribute the decline to sentiment and confidence rather than deteriorating fundamentals. Michael Field, chief equity strategist at Morningstar, said: "This decline appears to be driven largely by sentiment rather than fundamentals. Simply put, it's loss of confidence." He explained that growth stocks derive much of their value from future cash flows that "require a lot of faith from investors." Charlie Dai, VP principal analyst at Forrester, attributed concerns to the possibility that AI infrastructure spending may be "peaking faster than expected." Dai added that "investors are reassessing whether near-term revenues can justify unprecedented AI spending levels, while some also worry about growing competition in chips and AI infrastructure." He characterized the selloff as "less about weakening AI demand and more about a repricing of expectations after an exceptionally strong rally."

The weakness extended to Asia on Wednesday, where semiconductor stocks led regional declines. In South Korea, SK Hynix closed 9.61% lower after earlier dropping over 15%, despite the chip giant posting record quarterly profit and revenue—a disparity that highlights investor focus on future growth expectations over current earnings. Samsung Electronics fell more than 5%, LG Innotek dropped 10.89%, and Seoul Semiconductor shed 8.89%. In Japan, Kioxia fell 13.85%, Tokyo Electron declined 10.59%, and SoftBank Group, a major AI investment proxy, lost 6.95%. Taiwan's TSMC, the world's largest contract chip manufacturer, fell 3.51%. U.S. semiconductor stocks also weakened overnight: Intel dropped nearly 6%, AMD lost 8%, and memory names Micron and Seagate each lost more than 8%. Despite the sharp pullback, some investors view it as an opportunity. Kieron Poon, investment director of Asian equities at Aberdeen Investments, said the recent volatility "has not changed our long-term positive view," and noted that "the recent market pullback has brought valuations to more attractive levels, creating opportunities for us to add exposure to high quality businesses at more reasonable prices." David Riedel, founder and president of Riedel Research Group, told CNBC that while concerns over AI financing and Chinese competition have weighed on sentiment, "the market is healthy" and memory chipmakers "will be fine" but "just have to give back some of those sudden gains."

The selloff reflects a sharp reversal in investor sentiment toward the chip sector, which has been a primary beneficiary of the AI boom over the past year. The Philadelphia semiconductor index rose 92% in 12 months as capital flooded into the space, but mounting concerns about whether AI spending can sustain these valuations—particularly as growth stocks price in cash flows far into the future—have prompted a reassessment. Analysts distinguish between a loss of confidence in the near term and a fundamental weakening of AI demand; Michael Field of Morningstar characterized it as "loss of confidence" driven by the gap between current prices and distant future cash flows, while Forrester's Charlie Dai framed it as a repricing after an "exceptionally strong rally" rather than a collapse in AI infrastructure demand.

The declines were sharply concentrated: 20 of the world's most valuable chip stocks lost $1.3 trillion（約210兆円） since Friday market close, with memory chipmakers (SK Hynix, Samsung, Micron) particularly hard hit despite SK Hynix posting record quarterly profit and revenue. Regional weakness extended across Asia on Wednesday, though some investors and analysts view the pullback as creating buying opportunities at more reasonable valuations. David Riedel of Riedel Research Group told CNBC that the market is "healthy" and memory chipmakers "will be fine," characterizing recent gains as "froth" that the market is now giving back.

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