SWKS - AMD Nvidia lead chip declines as economic data spurs recession talk

2023-04-05 12:49:29 ET

AMD ( NASDAQ: AMD ) and Nvidia ( NASDAQ: NVDA ) led the semiconductor industry lower on Wednesday as investors worried about weaker-than-expected economic data and the potential for a recession.

AMD ( AMD ) shares fell more than 4% while Nvidia ( NVDA ) fell 3.5% , due in part to worries about Google ( NASDAQ: GOOG ) ( GOOGL ) highlighting the capabilities of its own custom chips.

In a research paper, Google ( GOOG ) ( GOOGL ) said the fourth-generation Tensor Processing Units, or TPUs, that train its artificial intelligence models are faster and more power-efficient than Nvidia's ( NVDA ) A100 chips.

Google ( GOOG ) did not compare the fourth-generation TPUs to Nvidia's ( NVDA ) H100 chips because those came to market after Google's chips and use newer technology.

Intel ( NASDAQ: INTC ) fell more than 1.5% even as it was reported that European Union lawmakers are likely to finalize a 45B€ plan to fund chip production in an effort to reduce reliance this month.

Intel ( INTC ) has worked to increase its manufacturing presence on the continent and compete in the foundry space, announcing plans to build a fab in Germany and discussing plans for another plant with Italy and other European countries.

Taiwan Semiconductor ( TSM ), the world's largest semiconductor foundry, fell nearly 3% in mid-day trading, while GlobalFoundries ( GFS ) dropped 4.6%.

Smartphone-related chip stocks also fell, including Skyworks Solutions ( SWKS ), Qorvo ( QRVO ) and Broadcom ( AVGO ), as Apple ( AAPL ) manufacturing partner Foxconn reported strong first-quarter results but forecast a decline for the upcoming quarter.

Looking ahead, Foxconn ( OTCPK:HNHPF ) said it expects second-quarter revenue to decline sequentially and on a year-over-year basis because of a seasonal off-peal period and an "unseasonally strong pull-in in the first half of last year which occurred as the components shortage from 2021 eased."

A number of other semiconductor stocks fell on Wednesday, including Micron ( MU ), NXP Semiconductors ( NXPI ) and ON Semiconductor ( ON ), all of which declined 1.5% or more .

On Tuesday, data from the Semiconductor Industry Association pointed to a rebound in semiconductor sales in February .

For further details see: