Micron's Selloff Highlights Risk of Sky-High AI Expectations
What was the market reaction in South Korea to Micron's news?
Micron's news triggered drops in South Korea's two biggest companies, memory makers Samsung Electronics Co. and SK Hynix Inc., though they recouped their losses by the close on Thursday. The traditional output of supplying memory for PCs, smartphones, and more conventional data center use is still recovering from a slump last year, leading to greater share price uncertainty for these businesses.
How has the global semiconductor shares index performed this month?
The global semiconductor shares index has experienced a decline of about 5% since reaching an all-time high earlier this month. This drop follows the recent selloff of Micron Technology Inc. and the underperformance of other major players in the industry, such as Nvidia Corp. and Taiwan Semiconductor Manufacturing Co.
How did Nvidia Corp.'s stock performance affect the semiconductor market?
Nvidia Corp.'s stock performance had a significant impact on the semiconductor market. As the company's stock price soared due to its dominant position in AI chips, it boosted the overall semiconductor industry. Other semiconductor manufacturers also experienced growth during this upcycle, with the iShares Semiconductor ETF more than doubling the S&P 500's price change over the past 12 months. However, the rapid rise in market values has raised concerns about overexuberance and potential corrections, as seen with Nvidia's recent drop.