Chip Stocks Plunge Amidst Demand Concerns
Key Points:
* Semiconductor stocks experienced a widespread decline on Thursday.
* SK Hynix (000660.KS) reported uncertainty in semiconductor demand for 2023.
* Nvidia (NVDA), Arm (ARM), and Micron (MU) were among the hardest-hit.
Reason for Decline:
SK Hynix, a supplier to Nvidia, expressed caution regarding memory chip demand during its earnings call. The company cited inventory adjustments by PC and smartphone manufacturers, as well as geopolitical risks.
Impact on Stocks:
* Nvidia dropped significantly, with a decline of up to 2%.
* Arm witnessed a plunge of nearly 6%.
* Micron recorded a loss of almost 4%.
Market Divergence:
The decline highlights a divergence in the semiconductor market:
* Consumer-oriented chips are facing pressure due to weak demand and excess inventory.
* Data center-focused chips used in artificial intelligence (AI) are experiencing continued growth.
Outlook:
Analysts warn that the gap between non-AI and AI chip stocks may narrow as AI revenue growth slows. Big Tech companies have indicated reduced spending on AI investments.