Chip Stocks Sink at Midday as CXMT Rattles Memory and Lumentum Drops Nearly 10%
The iShares Semiconductor ETF fell about 2% by midday Monday as memory names slid on China's CXMT news and AI optical suppliers Lumentum and Applied Optoelectronics dropped 7% to 10%, while Nvidia and TSMC held up better.
Chip stocks took the brunt of Monday's selling. With the bond market closed for Columbus Day, moves across the broader market were relatively muted, but semiconductors stood out: the iShares Semiconductor ETF (SOXX) was down 2.16% at midday and the VanEck Semiconductor ETF (SMH) down 1.67%. Memory names fell after China's CXMT flagged progress on a denser DRAM design, and AI optical suppliers fell hardest of all.
Chipmakers: smaller AI names fall hardest
| Company | Ticker | Midday move | Price |
|---|---|---|---|
| Lumentum | LITE | -9.74% | $995.85 |
| Applied Optoelectronics | AAOI | -7.40% | $101.53 |
| Credo Technology | CRDO | -5.25% | $205.19 |
| Arm Holdings | ARM | -3.62% | $256.64 |
| Astera Labs | ALAB | -3.61% | $329.84 |
| Intel | INTC | -3.37% | $101.18 |
| Marvell Technology | MRVL | -2.98% | $267.07 |
| Advanced Micro Devices | AMD | -2.40% | $593.51 |
| Lam Research | LRCX | -2.03% | $312.36 |
| Broadcom | AVGO | -1.21% | $357.16 |
| Nvidia | NVDA | -1.15% | $226.65 |
| Taiwan Semiconductor | TSM | -1.13% | $448.14 |
The pattern is clear in the numbers: the two biggest names, Nvidia and TSMC, fell about 1.1%, while smaller AI-connectivity and optical suppliers fell several times as much. Lumentum and Applied Optoelectronics make optical components used in AI data centers, and Credo and Astera Labs make connectivity chips. I did not find a company-specific catalyst for any of them on Monday. Applied Optoelectronics has dropped sharply before on sector sentiment, including a 12% fall in August on a $600 million equity offering. Intel was also lower after CEO Lip-Bu Tan called Chinese AI models like DeepSeek "good enough" and low cost.
Memory and storage: CXMT pressure widens
| Company | Ticker | Move | Price |
|---|---|---|---|
| SanDisk | SNDK | -5.96% | $1,487.59 |
| Roundhill Memory ETF | DRAM | -4.58% | $54.57 |
| SK Hynix (Seoul close) | 000660 | -4.52% | 1,605,000 won |
| Samsung Electronics (Seoul close) | 005930 | -4.39% | 250,500 won |
| SK Hynix ADR | SKHY | -3.89% | $162.45 |
| Seagate Technology | STX | -3.64% | $754.52 |
| Micron Technology | MU | -3.25% | $995.59 |
| Western Digital | WDC | -2.10% | $388.96 |
The memory trade is the clearest catalyst of the day. CXMT said it had made key progress on a 4F² DRAM cell design and plans to introduce DDR5 server memory based on it by the end of 2026, though it gave no specifications or launch date. Micron closed Friday at $1,029.00 and slipped below $1,000, a round-number level TradingKey called key support. Premarket, Micron was down about 2.15%, so the losses widened after the open. Memory and storage quotes are from late morning and may differ from the other figures here.
Why chips are under pressure
Three things are weighing on the group at once. CXMT's announcement raised worries about a fourth DRAM competitor, with Counterpoint Research putting its second-quarter share at 10%, up from 4% a year earlier. Memory stocks were already under pressure from concerns that prices may be near a peak, and the Roundhill Memory ETF lost 7.4% last week. And after a big run in AI-related chips this year, investors appear to be taking profits in the most extended names, which is consistent with the larger drops in the smaller optical and connectivity stocks.
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