Chip stocks tumble on peak-demand fears

Shares of leading semiconductor companies tumbled across global markets Friday as investors worried the industry's long-running boom may be running out of steam, triggering a broad sell-off in chip stocks.

Japanese memory chipmaker Kioxia plunged 16.10% to close at 52,110 yen after hitting its daily lower limit on the Tokyo Stock Exchange. Unlike South Korea, Japan's stock market uses fixed price limits based on a stock's previous closing price.

The drop left Kioxia down 52.06% from its record closing high of 108,700 yen on June 22. In less than a month, the company's market capitalization was effectively cut in half, knocking it from Japan's most valuable listed company to fifth by market value. Chip equipment makers Tokyo Electron and Advantest also fell 8.17% and 7.20%, respectively. The sector-wide sell-off weighed on the broader market, sending the Nikkei 225 down 4.03%.

Even Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, could not escape the selloff despite reporting earnings that comfortably exceeded market expectations. Its shares fell 7.29 percent, dragging Taiwan's benchmark Taiex index down 6.47 percent.

The weakness across Asian markets followed a sharp downturn in U.S. semiconductor shares, where concerns over a potential industry peak gathered momentum. Investor sentiment soured after reports circulated that investment banks, including Morgan Stanley, had advised clients to lock in gains from semiconductor stocks.

The Philadelphia Semiconductor Index, which tracks 30 U.S.-listed chip companies, fell 4.29% Thursday, leaving it 18.91% below its record high set on June 22. SK hynix's American depositary shares, listed on the Nasdaq, plunged 13.69% to close at $152.31, finishing just above their IPO price of $149. Other major U.S. chipmakers also came under heavy selling pressure. SanDisk tumbled 12.63%, Seagate Technology fell 10.00% and Micron Technology lost 5.65%.


지민구 warum@donga.com