Seoul: Global semiconductor and technology stocks witnessed significant volatility in July, resulting in the loss of trillions of dollars in market value before chipmakers saw a rebound due to robust cloud-computing earnings and sustained investments in artificial intelligence.
According to Anadolu Agency, an index that tracks 80 of the largest semiconductor companies globally saw a decline of over $3 trillion in market value from the start of July to the lowest point of the selloff. This dramatic shift reflects the turbulence within the sector. The iShares Semiconductor ETF, which monitors major US-listed chip companies, experienced a 22.1% drop in July, marking its steepest monthly decline since December 2002, yet remained 67.7% higher than at the year's onset.
Market fluctuations were pronounced, with the Philadelphia Semiconductor Index rebounding approximately 10% over the last two days of July, marking its strongest two-day increase since mid-June. Despite this, the index was still about 22% below its peak on June 22. In South Korea, the Kospi index demonstrated even larger swings, initially dropping by 10.8% on July 28, then surging nearly 18% three days later as investors returned to semiconductor stocks.
Chipmakers reported significant earnings growth despite the market volatility. Nvidia recorded an 85% revenue increase year over year for its fiscal first quarter, while Micron Technology's revenue surged 346% in the fiscal third quarter. Samsung Electronics and SK Hynix also reported substantial annual revenue and profit growth, driven by strong demand for memory products and successful mass shipments of HBM4.
Investment in artificial intelligence remained a key focus for technology companies. Microsoft and Amazon reported significant revenue growth in their cloud services, with Azure and AWS showing substantial increases in sales and operating profit. Alphabet and Meta also increased their capital expenditures, primarily directed toward AI infrastructure and cloud services.
Memory prices saw notable rises, with DRAM and NAND flash prices increasing significantly in the second quarter. TrendForce forecasts further price increases in the third quarter but notes that growth may moderate as higher memory costs strain the affordability for PC and smartphone manufacturers.
The semiconductor industry continues to expand production capacity, with global chipmaking-equipment sales expected to reach a record $165.9 billion this year, underscoring the ongoing investment in technology and AI development.