Chip stocks faced a devastating downturn on Friday, marking the semiconductor industry’s worst performance since April 2025. The sector saw a staggering loss of more than $1 trillion in market value, primarily driven by a significant upheaval in the AI trade.
The fallout was substantial but varied among different stocks. According to data from Yahoo Finance, the semiconductor sector collectively wiped out approximately $1.4 trillion in value that day, with the ten largest decliners alone accounting for around $1.1 trillion of that sharp decline. Leading this downward trend were major players like Nvidia, Taiwan Semiconductor Manufacturing (TSMC), and Broadcom.
Nvidia emerged as the most affected, losing nearly $330 billion in market capitalization. Other notable losses included TSMC, Broadcom, and Micron, each suffering declines exceeding $100 billion. The Philadelphia Semiconductor Index plummeted by 10.3%, while the iShares Semiconductor ETF registered a similar trajectory, both suffering their steepest drops since the post-Liberation Day selloff in April 2025. The broader State Street Technology Select Sector SPDR ETF also mirrored this downturn.
In the broader market, the S&P 500 snapped its nine-week winning streak, decreasing by 2.6%. However, a closer look at market internals revealed no signs of widespread panic, with slightly more decliners than advancers—238 stocks up against 264 down. Conversely, the Nasdaq 100 experienced a sharper decline of 4.8%, with a significant disparity between advancers and decliners, showing 33 stocks up and 68 down, indicating that the turmoil was concentrated mostly within the technology-heavy index.
The negative sentiment in the semiconductor sector also reverberated internationally. The iShares MSCI South Korea ETF plunged 14.1%, representing its worst day since March 2020. Given that Samsung Electronics and SK Hynix dominate this fund, the decline served as an indicator of stress within the memory and AI supply chains.
While the market is not in outright panic, analysts warn that if semiconductor stocks do not stabilize early in the upcoming week, the cascading effects could spread to the broader market.
