Selloff Intensifies! Global Chip Stocks Wipe Out $1.5 Trillion in Market Value in Three Days

Amid growing concerns that major tech firms are pouring excessive capital into artificial intelligence (AI) and expectations of tighter monetary policy from the U.S. Federal Reserve (Fed), the total market capitalization of global semiconductor stocks has evaporated by more than $1.5 trillion this week, as investor panic spreads across the semiconductor sector.

Asian tech stocks continued their selloff on Wednesday (29th), led by semiconductor stocks. In South Korea, SK Hynix plunged over 15% intraday, closing down 9.61%. Despite reporting record-high quarterly revenue and profits, the company's results fell short of analyst expectations.

Samsung Electronics dropped over 5%, LG plummeted 10.89%, and Seoul Semiconductor tumbled 8.89%.

Meanwhile, Japanese chip stocks broadly declined, with Kioxia plunging 13.85%, Tokyo Electron falling sharply by 10.59%, and SoftBank dropping 6.95%.

According to a Thursday report by First Financial News, the current selloff was led by NVIDIA (NVDA-US): since last Friday's close, NVIDIA's market value has shrunk by nearly $250 billion. SK Hynix and Samsung Electronics lost $176 billion and $173 billion in market value, respectively. Micron Technology (MU-US) and AMD (AMD-US) saw their market caps shrink by approximately $130 billion, while TSMC (2330-TW) (TSM-US) lost $119 billion in market value.

FactSet statistics show that the combined market value of the world's top 20 semiconductor companies has declined by over $1.5 trillion since last Friday's closing.

Over the past two years, the explosive growth of the AI industry has made semiconductor stocks one of the biggest beneficiaries, with capital flooding into related stocks, betting on performance gains from massive AI capital expenditures.

The Philadelphia Semiconductor Index (SOX), covering 30 major U.S. chipmakers, surged 92% over the past 12 months but has retreated nearly 20% in the past month.

Michael Field, Morningstar's chief equity strategist, said: 'The core driver of this downturn is market sentiment.' He added, 'Simply put, market confidence has collapsed. We still favor most of these names, but the valuations of such growth stocks heavily depend on long-term cash flows, requiring strong investor confidence.'

Charlie Dai, Vice President and Chief Analyst at Forrester, pointed out that Alphabet (GOOGL-US), Google's parent company, recently raised its capital expenditure guidance for 2026, significantly expanding its AI computing infrastructure.

'Investors are reassessing whether unprecedented levels of AI investment can match short-term revenue growth, and there are also concerns about intensifying competition in the chip and AI infrastructure sectors,' said Dai.