The US semiconductor market is experiencing one of its most tense episodes in the past decade. Shares of the thirty largest US chip manufacturers in the ICE Semi index have shown a continuous decline for eight consecutive trading sessions. According to goha.ru, this marks the sector's longest peak in the last 16 years, highlighting the scale and depth of the current sell-off.
Eight-Day Drop Sets 16-Year Record
A key indicator of investor sentiment — the iShares Semiconductor ETF (SOXX) — has dropped 14% from its October peaks, falling to $514,71. Intel has seen particularly sharp movement: the company's capitalization has shrunk by more than 20% over the past two weeks alone, making it one of the most vulnerable links in the sector amid overall pressure on chip stocks.
What Is Driving the Sell-Off
A complex of factors triggered the sharp investor reaction. These include expert warnings about the threat of memory chip overproduction by 2029, as well as growing competition from Chinese manufacturers expanding their capacities and lowering prices. An additional blow to sentiment came from the downward revision of OpenAI's financial forecasts: projected annual revenue came in at $50 billion instead of the market-expected $70 billion, forcing investors to reassess valuations across the entire AI supply chain.
Macro Factors: Inflation and Rate Risks
Against the backdrop of industry challenges, additional pressure on the sector comes from US inflation and risks of key interest rate hikes. Higher borrowing costs directly impact AI infrastructure, which requires massive long-term investments in data centers and computing power. As a result, even companies with strong fundamentals are facing higher discounting of future cash flows.
Analyst Perspective: A «Recalibration», Not a Crash
Nevertheless, some analysts urge calm. UBS specialists describe the current situation as a market «recalibration», emphasizing that fundamental demand for massive AI projects remains strong. According to their assessment, the current decline reflects a reassessment of expectations rather than a structural shift in semiconductor demand, although investors will have to contend with higher volatility and sector sensitivity to macroeconomic signals in the coming months.
