Intel’s weak performance drags down semiconductor stocks globally

Semiconductor stocks worldwide saw a significant decline on Friday, August 2, following Intel’s poor earnings report and a broader global market downturn affecting major tech companies.

Ace per CNBC, Intel reported significant losses for the June quarter and announced plans to cut over 15% of its workforce as part of a $10 billion cost-saving initiative. The company’s shares dropped by 28% in morning trading.

The downturn affected other major chipmakers as well. Nvidia’s stock fell about 4% in premarket trading, amid reports of a US Department of Justice antitrust investigation into the company’s practices in artificial intelligence chips.

Meanwhile, in Asia, Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chip manufacturer, saw its shares drop 4.6%, while South Korea’s Samsung, the top memory chip producer, fell over 4%. SK Hynix, a supplier to Nvidia, experienced a significant decline, closing more than 10% lower.

The decline extended to Europe, where ASML, a key supplier of chip-making equipment, saw its shares fall over 8%. ASMI and STMicroelectronics also faced losses.

The broader tech sector was hit by a global equity sell-off that began in the US and spread to Asia and Europe. The VanEck Semiconductor ETF, which tracks major chip companies, closed 6.5% lower in the US on Thursday.

While some semiconductor companies like AMD and Nvidia are benefiting from the AI ​​boom, others like Qualcomm and Arm have yet to see similar gains in their financial results.