: Chip sector looks at 10% drop on week as signs point to declining demand

by | Jul 1, 2022 | Stock Market

The semiconductor sector was facing one of its worst weeks in an already lousy year following more evidence that the COVID-19 chip sector boom was drawing to a close. On Friday, the PHLX Semiconductor Index
SOX,
-3.99%
dropped nearly 5% as chip stocks fell across the board with shares of chip-equipment maker Lam Research Corp.
LRCX,
-7.64%
leading losses, down nearly 8%, and Broadcom Inc.
AVGO,
-1.78%
among the better performers with a 1.6% decline.

That puts the SOX index on track for a 9.5% fall on the week, its worst week since the week ending Feb. 28., when it shed 9.8%, according to FactSet data. The chip index is already down 38% for 2022, compared with a 21% loss on the S&P 500 index
SPX,
+0.51%
and a 30% drop on the tech-heavy Nasdaq Composite Index
COMP,
+0.33%.
Late Thursday, Micron Technology Inc.
MU,
-3.35%
stoked Wall Street fears that customers may have loaded up on chips during the COVID-19-triggered shortage and were now holding significant inventories after the memory-chip maker forecast quarterly sales that were more than $1.5 billion below expectations. Analysts on Friday wondered if weakness in the PC and consumer markets could also extend to data-center sales. Read: The chip boom likely over, as Micron says it’s in a ‘downturn’ Heading into Micron’s earnings, analysts were looking for more clues as to whether chip demand had pe …

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