Shares of semiconductor companies slumped after Democrats' election victory

Shares of semiconductor companies have fallen sharply this week due to increasing concerns that investments in artificial intelligence companies may be disrupted after the Democrats gained the majority in both the Senate and the House of Representatives of Congress in the USA.

While the midterm election results in the USA continue to have an impact on asset prices, it is discussed that the Democrats, who gained the majority in the House of Representatives and the Senate, may implement regulations that could limit artificial intelligence investments in the country.

Concerns that the progress in artificial intelligence technologies, which has become one of the important driving forces of global economic growth in recent years, may slow down and existing investments may be disrupted, led to an acceleration of sales in semiconductor stocks in the markets.

The support of other members to the messages of Yassamin Ansari, a Democratic member of the House of Representatives from the state of Arizona, advocating stricter regulations for the artificial intelligence sector and a temporary suspension of the development of advanced artificial intelligence technologies, increased the regulatory risks in this field.

The stagnation of data center investments due to the limitation of the development of artificial intelligence has caused existing question marks regarding the profitability and continuity of demand in the semiconductor industry to become evident.

The selling pressure, especially concentrated in the shares of chip manufacturers and data center companies, deepened.

Regulations expected to be made to technology companies are expected to be at the center of the agenda

In this process, it is expected that the expectations regarding artificial intelligence investments in the markets will be questioned again and possible regulations for technology companies will be at the center of the agenda.

In particular, question marks regarding the extent to which the high investment expenditures of technology companies will turn into profitability open up the high valuations in the sector to further discussion. Therefore, it will be monitored whether sales will spread to other sectors.

On the other hand, the semiconductor and artificial intelligence sectors play an important role in the growth of the USA, especially in recent years.

Although expectations that Democrats will limit artificial intelligence investments are increasing, the extent to which investments will be limited is expected to be one of the issues that the markets will follow.

Shares lost 7.8 percent to 36.8 percent in value

With these developments, on a weekly basis, share values decreased by 28.1 percent in Marvell Technology, 9.9 percent in Broadcom, 14.4 percent in Intel and 8.8 percent in Nvidia, one of the US-based semiconductor manufacturers.

This week, investors lost 22 percent of Micron Technology, 11 percent of AMD, and 7.8 percent of Texas Instruments Incorporated and GlobalFoundries.

On the Asian side, shares of South Korean semiconductor manufacturers SK Hynix lost 20.2 percent and shares of Samsung Electronics lost 16.1 percent.

The price of Japanese Kioxia's shares fell 36.8 percent, and Taiwanese TSMC's shares fell 9.9 percent.

On the European side, the value of Dutch ASML's shares decreased by 11.5 percent.