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AMD, Samsung Demand Woes Spoil Rally in Semiconductor Stocks

  • Semiconductor index heads for biggest annual drop since 2008
  • Stocks still not cheap enough for some after 2022 plunge
Semiconductor stocks are the most cyclical part of the technology world because of the boom-and-bust nature of chip demand.

Semiconductor stocks are the most cyclical part of the technology world because of the boom-and-bust nature of chip demand.

Photographer: I-Hwa Cheng/Bloomberg
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A sizzling rally in global semiconductor stocks this week is starting to look illusory as a slew of disappointing earnings from major chipmakers pointed to a likely protracted downturn for the sector. 

The Bloomberg Asia Pacific Semiconductors Index sank 1.6% Friday after gaining 6.7% earlier in the week. Taiwan Semiconductor Manufacturing Co. led the decline, dropping 2.9%. A gauge of European chip stocks fell for the first time in six sessions, and the selloff looks likely to spill over to the US, where the Philadelphia Semiconductor Index has jumped 8.8% this week.