U.S. semiconductor stocks staged a recovery on Thursday morning, recouping part of the losses that hit the sector earlier in the week. By 05:41 ET (09:41 GMT) several major chipmakers were trading higher in premarket sessions, following a strong upward move in Chinese semiconductor equities that helped steady investor sentiment.
Among U.S. names, Micron Technology, Intel, Coherent and Marvell Technology each rose by more than 3% in premarket trade. Applied Materials climbed 3.8%, Advanced Micro Devices added 2.2%, and Lumentum Holdings gained 2.7%.
The positive momentum traced back to a significant advance in Chinese semiconductor stocks, where investors are increasingly optimistic ahead of a heavily watched market debut. The CSI Semiconductor Index finished the session up 8.8% after Changxin Memory Technologies - identified in reports as CXMT - said it would begin book-building on July 15 for a Shanghai initial public offering targeting proceeds of 29.5 billion yuan, roughly $4.34 billion.
Changxin, described in public filings as one of the world's leading DRAM suppliers, held approximately 7.7% of the global DRAM market last year. That position and the scale of the planned fundraising helped underpin the enthusiasm in Chinese chip shares, which in turn supported a rebound in U.S. names.
The rebound follows a broad selloff in chip stocks two days earlier, when global semiconductor equities fell hard after shares of Samsung Electronics dropped unexpectedly. The decline in Samsung's stock came even as the South Korean conglomerate reported second-quarter operating profit that topped expectations - the company said it anticipates operating profit of 89.4 trillion won, a nearly 19-fold increase from a year earlier and larger than its combined profit over the prior three years.
Samsung's reported operating-profit figure exceeded an LSEG SmartEstimate of 87.3 trillion won, and revenue was projected to rise 129% to 171 trillion won. Despite that beat, Samsung shares fell sharply, a reaction that some market participants tied to the view that much of the favorable news had already been priced into the stock. The selloff also highlighted persistent questions about the sustainability of the AI-driven demand that has been a major driver of the chip sector's rally over the past year.
Market participants have also noted that memory chip prices have climbed significantly over the same period, prompting investor concern about whether demand can continue to justify elevated pricing. Those dynamics left the sector vulnerable to rapid swings in sentiment, as seen in the sequence of a sharp decline followed by a partial recovery tied to the Chinese IPO news.
Summary
U.S. chip stocks bounced back in premarket trading after a selloff earlier in the week, helped by a strong rally in Chinese semiconductor shares linked to Changxin Memory Technologies' IPO book-building announcement. The move occurred amid lingering investor questions about the durability of AI-driven chip demand and rising memory prices.
Key points
- Premarket gains: Micron, Intel, Coherent and Marvell each rose more than 3%; Applied Materials, AMD and Lumentum also gained.
- Chinese catalyst: CSI Semiconductor Index jumped 8.8% after CXMT announced book-building for a 29.5 billion yuan Shanghai IPO.
- Sector sensitivity: The rebound followed a global selloff driven by a sharp drop in Samsung shares despite that company reporting forecast-beating profit.
Risks and uncertainties
- Durability of demand: Questions remain about the sustainability of AI-driven demand that has supported the chip rally, affecting both U.S. and global semiconductor stocks.
- Price dynamics: Rapid increases in memory chip prices raise uncertainty over whether demand will keep pace with higher pricing, posing a risk to memory suppliers and equipment vendors.
- Sentiment-driven volatility: The market demonstrated vulnerability to sharp moves in single large-cap names, such as Samsung, which can trigger broader sector swings.