The chip industry has recently stabilized on the stock market. Now a new wave of sales is hitting them - triggered by, of all people, one of their most important representatives.
The sell-off in chip stocks is hitting many companies worldwide such as SK Hynix, Samsung, Infineon, ASML and US stocks such as Micron Technology and Broadcom.
Broadcom boss Hock Tan warns of excessive AI expectations and financing problems, which are exacerbating the falling prices of semiconductor stocks.
The large investments by major data center operators could lead to capital shortages and rising capital costs, which hurt the chip business.
According to analyst George Saravelos, market concentration in the AI sector poses a systemic risk due to possible disruptions in the ecosystem.
Dusseldorf. Stock exchanges worldwide are being hit by another wave of selling in chip stocks. The losses are greatest in South Korea: There, the shares of memory chip manufacturer SK Hynix fell by up to eleven percent. Competitor Samsung lost up to nine percent.
In Germany, the shares of the chip companies Infineon, Suss Microtec and Aixtron are under pressure. In Europe, stocks like those of chip supplier ASML are also falling. The same applies in pre-market trading for US chip stocks such as Micron Technology and Broadcom.
The market experts at Dekabank attribute the falling prices of chip stocks to Broadcom boss Hock Tan.
In their market commentary they write: “The sell-off in semiconductor stocks is intensifying after the Broadcom boss warned of excessive expectations for AI and of financing problems during expansion.”
At a technology conference in Singapore on Monday, Tan sharply criticized current developments on the stock market and compared AI investors to gamblers. “Many investors have no idea what they are investing in,” the financial service Bloomberg quoted him as saying. They set “very extreme expectations” and then realized that it was “almost like they were in a casino.”
Chip stocks were a flywheel of the AI rally in the first half of the year. Particularly for memory chips, high demand that had previously been price-insensitive was met with a limited supply that could be expanded. This enabled the chip companies to achieve extraordinary profit growth.
Stocks like SK Hynix and Samsung benefited enormously from this. The South Korean leading index Kospi, which depends largely on the two chip stocks, has risen by up to 150 percent since the beginning of the year. In the USA, the Philadelphia Semiconductor Sector index rose by up to 106 percent.
Concerns about further growth expectations caused shares to fall significantly from mid-June onwards, but recently they appeared to have stabilized. Now they are being hit by a new wave of sales.
Because Tan didn't just compare the stock market to a casino. He also warned that capital shortages could replace the chip shortage as the most important bottleneck in AI expansion. If there were no fresh money to finance the development of new models and the construction of additional data centers, the chip companies' business would also suffer.
Economist Thorsten Slok from asset manager Apollo Global Management has calculated that the expected investments of the major data center operators (hyperscalers) Amazon, Alphabet, Meta, Microsoft and Oracle could rise to $892 billion this year. A year ago, analysts were still expecting $465 billion.
By 2027, investments could even rise to $1.1 trillion. A year ago, analysts had still calculated $495 billion. To make the scale of these expenditures clearer: In 2025, Germany had gross government capital expenditure of the equivalent of $170.6 billion. This includes federal, state, local and social insurance companies.
Even the financially strongest hyperscalers such as Alphabet and Amazon could no longer raise these huge sums from their current business. They are therefore increasingly financing themselves via the bond market. There they compete with other companies and, above all, with states, whose financing needs are also growing.
This increases the supply of bonds. States and companies come into direct competition for capital, and interest rates rise. Lip-Bu Tan, head of the US chip company Intel, said at a conference in Singapore: “If there is a challenge, it is capital and the cost of capital.”
The US think tank Brookings Institution recently calculated that AI companies would have to generate sales of almost four trillion dollars by 2032 in order to recoup their investments in data centers. This would require annual growth of around 85 percent, based on an estimated combined sales base of around $100 billion for the AI start-ups OpenAI and Anthropic.
Adding to the concerns about further AI expansion is a development from China that is weighing on chip values. As the South China Morning Post reports, Chinese memory chip manufacturer CXMT has made good progress in developing a new DRAM architecture.
DRAM is the most widely used memory chip type worldwide. Such components serve as RAM so that programs run quickly. Analyst Andreas Lipkow from broker CMC Markets therefore says: “The technological competition from the Middle Kingdom is fueling concerns about how long the high valuations and profit margins of the established chip companies can still be justified.”
The extent of the concerns can already be seen from the price-earnings ratio (P/E) of some stocks. Based on the net profits expected in the 2027 financial year, the P/E ratio for SK Hynix and Samsung is just under four. Micron has a value of six.
This means that parts of the booming chip industry are valued as cheaply as stocks from the struggling European auto industry, measured in terms of the P/E ratio. The fact that investors still don't take advantage is a sign that they doubt that profits will actually rise that much in the long term.
However, some market observers are surprised by the price reaction. Phillip Wool, chief market strategist at Rayliant Global Advisors, points out with regard to CXMT that they have not yet proven series production and are still behind Samsung and SK Hynix in terms of market share.
“More importantly, we’re not even talking about HBM here,” Wool told CNBC. HBM is the most sophisticated variant of DRAM. HBM's most important customer is Nvidia, the global leading provider of AI infrastructure. For Wool, the sell-off is more of a sign of how fragile the mood in the AI sector is.
This hits the stock market at a time when it is already struggling. The market-wide US index S&P 500 has risen by four percent since July. But it is only supported by the performance of a few large companies such as Apple, Amazon, Alphabet, Meta, Microsoft and Nvidia. The equally weighted S&P 500, in which all stocks have the same weight, has been slightly in the red since the beginning of July.
In view of the strong market concentration, analyst George Saravelos from Deutsche Bank sees a possible “disruption” in the AI ecosystem as the greatest systemic risk for the market: “For example a security incident, a failed IPO or disappointing sales figures.” The risk is currently being underestimated the most in the markets.
It is precisely in this phase that the reporting season for the past quarter falls. The first US banks will kick things off this Tuesday, and the first hyperscalers will present their figures at the end of the month. With convincing results they could turn the market mood back to positive. If they disappoint, that would be the next blow to the stock market.
