AMD, Micron and Nvidia extend losses as chip stocks get clobbered

Semiconductor stocks fell on Tuesday following weakness in Asia and Europe.

Nvidia ticked 1% ower while Intel sank 6% and AMD fell 8%. Memory chipmaker Micron dropped 10%, while Seagate lost 11% and Sandisk and Western Digital each lost about 12%.

The moves followed a bout of heavy selling in Asia.

In South Korea, SK Hynix closed 14.65% lower, while Samsung Electronics lost more than 13%. Other AI-linked names also saw heavy selling, with Samsung SDI dropping 11.37%, LG Innotek fell 16.29%, Seoul Semiconductor falling 8.78% and LG Chem losing 7.5% at the end of its trading day.

Japan's chip names also declined. Tokyo Electron dropped 10.96% at the close, Advantest slid over 10%, while SoftBank Group , a major AI investment proxy through its stake in Arm , fell 4.43%. Shares of Japan's computer memory manufacturer Kioxia plunged more than 18%.

Taiwan's TSMC closed almost 3% lower. Mainland China's tech-heavy ChiNext 300 index was down 6.49%, while the Hang Seng China Semiconductor Chips Index fell 7.02%.

Selling continued in Europe with key chip companies falling in early trade. ASML shares were lower after The Information reported that a Chinese company is manufacturing an immersion deep ultraviolet lithography machine, an area that ASML dominates. ASML fell more than 8% on Monday.

Other chip stocks, including ASM International and BE Semiconductor fell between 2% to 3% in early trading.

The sell-off followed another weak session for U.S. semiconductor stocks on Monday . The VanEck Semiconductor ETF (SMH) lost more than 2%, adding to its Friday losses. AMD and Teradyne dropped 5% and 4%, respectively. Micron Technology shed about 2%.

The weakness underscores how closely Asian technology shares and the U.S. AI trade have become intertwined.

Samsung Electronics and SK Hynix are among the world's largest suppliers of high-bandwidth memory chips used in AI servers, making their shares particularly sensitive to shifts in expectations for spending by U.S. hyperscalers.

Sharp swings in SK Hynix shares underscore the uncertainty surrounding the AI investment cycle, said Acadian Asset Management's senior vice president Owen Lamont, arguing that investors still have little visibility into how the technology will ultimately affect the economy. "Right now we're facing an incredible uncertainty," he told CNBC. "No one has any idea how this AI process is going to affect our economy, and so I think it's going to be rocky no matter what." Lamont also added that leveraged exchange-traded products could be adding to market swings, even if they are not solely responsible for SK Hynix's recent volatility. "More generally, the entire ecosystem of levered ETFs in Korea, also in Hong Kong and in the United States, are possibly adding volatility and magnifying market fluctuations."

The sell-off also reflects a broader deterioration in sentiment toward semiconductor stocks after recent media reports highlighted China's ambitions in memory chips and lithography equipment, according to Sundeep Gantori, chief investment officer for equities at Standard Chartered.

The long-term outlook remains intact, he said: "The market opportunity remains sufficiently large for multiple players to benefit and coexist," with the AI investment cycle continuing to support leading technology companies.

"The other reason behind today's weakness in Korea is around some broker reports around memory price peak in 2027, which is not too different from our view," Gantori said. While Standard Chartered expects memory prices to peak next year, he added that "what matters is risk-reward and at current valuations, risk-reward has improved."

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