Global semiconductor stocks experienced a significant decline on Friday following the release of lackluster earnings results by U.S. chip firm Intel. The company’s shares plummeted by 21.51% during premarket trade in the U.S. after reporting a substantial earnings miss for the June quarter. Additionally, Intel announced plans to lay off over 15% of its workforce as part of a $10 billion cost-reduction initiative.
The negative sentiment spread across Asia, with Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chip manufacturer, closing 4.6% lower in Taiwan. Samsung, the leading memory semiconductor firm globally, also saw its shares drop by over 4% in South Korea. SK Hynix, a rival of Samsung and a supplier to Nvidia, experienced a sharp decline of more than 10%.
The sell-off continued in Europe, where shares of ASML, a key provider of tools for cutting-edge chip manufacturing, fell by over 6% in the Netherlands. ASMI, another Dutch company, witnessed a 9% decrease in its stock price. STMicroelectronics and Infineon also experienced declines.
Intel’s disappointing results highlight the mixed performance within the semiconductor sector. While companies like AMD and Nvidia continue to thrive due to the artificial intelligence boom, others such as Qualcomm and Arm have yet to reap the benefits in their financial results.
The global equity sell-off, which originated in the U.S. and spread to Asia and Europe, further weighed on chip stocks. The tech-heavy Nasdaq and chip stocks were particularly affected. The VanEck Semiconductor ETF, which includes major players in the sector, closed approximately 6.5% lower in the U.S. on Thursday. Nvidia, among other major U.S. chip names, also saw a decline of around 3% in pre-market trade on Friday.