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BackPhilly index falls for 5 consecutive days... For the first time since the end of July
Philly index falls for 5 consecutive days... For the first time since the end of July
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연합뉴스47 minutes agoBusiness2 min readSouth KoreaView original

Philly index falls for 5 consecutive days... For the first time since the end of July

semiconductorai investmentPhiladelphia Semiconductor Index

Quick Look

  • U.S. semiconductor stocks fell for five consecutive trading days amid concerns about the burden of AI investment, and the Philadelphia Semiconductor Index (SOX) recorded a 7.6% cumulative decline.
  • While the weakness centered on memory stocks continued, remarks by Broadcom CEO and news of technological progress by China's Changxin Memory added to concerns about intensifying competition.

AI-generated summary

Why It Matters

U.S. semiconductor stocks are falling due to concerns about the burden of AI-related investments, and this is the first decline for five consecutive trading days since the end of July.

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(Seoul = Yonhap News) Reporter Joo-ho Jeong = U.S. semiconductor stocks fell for five consecutive trading days amid concerns about the burden of investment in artificial intelligence (AI).

The Philadelphia Semiconductor Index (SOX), a representative index of the semiconductor industry, closed at 12,208.8 on the New York Stock Exchange on the 13th (local time), down 0.2% from the previous trading day, falling for the fifth trading day.

The cumulative decline during this period amounts to 7.6%. This is the first time since the end of July that this index has fallen for five consecutive trading days. At that time, it plummeted 15.8% over 5 trading days.

On this day, the closing price of the Philadelphia Semiconductor Index was down 16.7% from its 52-week high. 22 out of 30 index constituents fell more than 20% from their peak.

iShares Semiconductor ETF (SOXX), a representative semiconductor exchange-traded fund (ETF), also closed at $543.84, down 0.2% on the day. It fell for 6 consecutive trading days. This is the longest decline in about 16 months since May of last year.

The decline was noticeable in memory stocks.

On this day, Micron fell 3.7% for 4 consecutive trading days, and SK Hynix American Depositary Receipt (ADR) fell 3.2% for 7 consecutive trading days.

Following Broadcom CEO Hok Tan's remarks about the AI ​​industry's 'capital bottleneck' and 'casino', concerns about intensifying competition were compounded by news that China's Changxin Memory (CXMT) had made progress in developing a new memory structure.

On the other hand, on this day, AI computing semiconductor stocks such as NVIDIA, AMD, and Broadcom rebounded by 0.7 to 1.9%. AI chip company Cerebras also fell for 5 consecutive trading days until the 12th, falling 19.2%, but rebounded 1.6% on the 13th.

Mizuho's Daniel O'Regan said investors are "waning their willingness to finance AI-related capital expenditures at any price."

As AI capital expenditures exceed free cash flow (FCF), companies have become dependent on external financing.

The International Monetary Fund (IMF) also warned in its recent World Economic Outlook (WEO) report that if expectations for improved profitability and productivity from AI turn out to be overly optimistic, investment in AI infrastructure may slow down sharply.

It is pointed out that the stock market, which has a high proportion of AI-related companies, may be particularly vulnerable.

What to Watch

AI outlook — possibilities, not facts

  • The decline in semiconductor stocks is likely to continue in the short term.

    Likely · Within weeks

Open Questions

  • How long will AI infrastructure investments last?
  • How will China Changshin Memory's technological progress affect its actual market share?

Related Topics

semiconductor
PeopleDaniel O'Regan
Organizationsmizuhointernational monetary fund
PlacesphiladelphiaNew York Stock Exchangechina
Topicsai investmentPhiladelphia Semiconductor Indexsoxxmicronsk hynixBroadcom
This article was originally published by 연합뉴스.

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