Semiconductor rout drags global markets lower as chip stocks extend July losses

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A punishing sell-off in memory chip stocks deepened through mid-July as a convergence of geopolitical turmoil, rising oil prices, and fears of growing Chinese competition hammered semiconductor shares from Seoul to Wall Street.

Semiconductor rout drags global markets lower as chip stocks extend July losses

A Multi-Week Decline Accelerates

The Philadelphia Semiconductor Index fell nearly 21% during July, with 18 tech stocks losing at least 30% over the month, according to MarketWatch data cited by Morningstar. The Roundhill Memory ETF and major memory names including Micron, Samsung Electronics, and SK Hynix all entered bear-market territory, having dropped more than 20% from their recent highs. YYahoo Finance YYahoo Finance Mmorningstar

The rout accelerated in mid-July as Reuters reported that Asian stocks faced renewed pressure from chipmakers, with the MSCI Asia Pacific index falling more than 2.5% and Japan’s Nikkei 225 heading for a technical correction — down 10% from its June peak. South Korea’s Kospi was among the hardest-hit markets, with SK Hynix shares plunging a record 15.4% in a single session in mid-July while Samsung Electronics slid 10.7%. Yyoutube Rreuters Sstraitstimes

Oil Prices and China Fears Fuel the Fire

Rising oil prices added to investor anxiety. Brent crude hovered around $85 a barrel by July 17 after U.S.-Iran tensions escalated sharply. Reuters reported that President Donald Trump declared an interim deal with Iran was “over,” prompting oil to jump roughly 10% in three days as the U.S. bombed Iranian targets and Iran struck U.S. bases in the Gulf. Rreuters Rreuters Rreuters

Compounding the pressure, Reuters reported that Chinese startup DeepSeek is developing its own AI chip for inference computing, a move that could reduce reliance on established chipmakers and intensify competition in the memory sector. The news triggered what South Korean analysts described as the “second DeepSeek shock,” sending Micron down 4.7%, SanDisk down 7.3%, and Western Digital down 7.9% in a single session. Rreuters Cchosun

SanDisk’s Silver Lining

Even as memory stocks reeled, SanDisk secured a bright spot. Reuters, citing an internal Meta Platforms memo, reported that Meta had locked in multi-year supply agreements covering flash storage from SanDisk, DRAM from Samsung, and fiber-optic equipment from Sumitomo Electric as part of a sweeping AI infrastructure expansion. SanDisk disclosed that its multi-year supply agreements represent roughly $42 billion in minimum contracted revenue. The stock surged nearly 7% on the news before being dragged back down by the broader sell-off. YYahoo Finance Bblocksandfiles

Despite the carnage, some analysts see the pullback as a valuation correction rather than a breakdown in long-term demand, noting that memory chip supply constraints are expected to persist through at least 2027. Iinvesting YYahoo Finance