Semiconductor stocks tumbled in on Monday, extending a recent decline as the escalating trade war between the U.S. and China added to headwinds surrounding the sector, according to Bloomberg.
Chipmakers were broadly weaker, with the Philadelphia Semiconductor Index down 3.6% in its fifth straight daily decline, its longest such losing streak since October. The benchmark index has lost more than 10% over the five-day slump and trade tensions have been a primary driver of the recent decline, as many chipmakers count China as a major market or as a key part of their supply chains
Among specific names, Intel fell 3.4% while Texas Instruments lost 3.3%. Both were in their fifth straight negative session. Micron was off 5% and Nvidia sank 5.9%. The VanEck Vectors Semiconductor ETF, an exchange-traded fund that tracks a basket of chipmakers, fell 3.2%, and its pre-market trading volume was the highest since May 31.
Also in focus was the latest data from the Semiconductor Industry Association, which showed total semiconductor sales fell 17.7% in June. RBC Capital Markets said that within the sub-sector of DRAM memory chips, average selling prices were down 46% in June, “the worst decline since March of 2008.“
While the SIA data showed month-over-month growth of 4.9%, Deutsche Bank described the report as “another soft month of data“ and said it came in below the bank’s expectations. The firm affirmed its cautious stance on the sector, with analyst Ross Seymore writing that “headwinds continue in the semi space, corroborated by weak SIA data & 2Q prints/3Q guides in earnings season thus far.“
Among notable results, AMD cut its full-year forecast last week, while Qualcomm gave a disappointing fourth-quarter sales outlook. On the upside, Western Digital reported fourth-quarter revenue that missed expectations, but the company’s CEO said it had “reached a cyclical trough.“
Over the weekend, ON Semiconductor reported second-quarter revenue that missed expectations and gave a weak third-quarter outlook. The stock slumped 9.9% in its biggest one-day drop since November 2015.
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