TXN - As Biden signs CHIPS Act into law Micron leads sector lower after issuing weak forecast

President Biden signed the CHIPS Act into law on Tuesday, calling it a "once-in-a-generation" piece of legislation to provide a stronger and more secure economy. However, the semiconductor industry moved noticeably lower as Micron Technology ( NASDAQ: MU ) issued a warning that its fourth-quarter would be weaker-than-expected, citing macroeconomic factors and supply chain constraints.

Micron ( MU ) shares fell more than 5% after the company said its fourth-quarter revenue would be at or below the low-end of its previous guidance of $6.8B to $7.6B that the company gave on June 30.

In addition, Micron ( MU ) said its bit shipments during the first-quarter would decline sequentially and there would be "significant" sequential declines in revenues and margins. Micron ( MU ) also added that it would be free cash flow negative in the first-quarter.

Micron ( MU ) also added that its total capital expenditures in 2023 would be down significantly when compared to 2022.

Following Micron's ( MU ) warning, several other chip companies traded lower on Tuesday, including Nvidia ( NASDAQ: NVDA ), which issued its own dire forecast on Monday.

Nvidia ( NVDA ) fell nearly 4%, while competitors Advanced Micro Devices ( NASDAQ: AMD ) and Marvell Technology ( MRVL ) lost 4% and 7% , respectively.

Intel ( NASDAQ: INTC ), which is seen as the biggest beneficiary of the CHIPS Act according to Bank of America, declined more than 2% near mid-day.

Other semiconductor companies also lost ground, including Texas Instruments ( TXN ), Analog Devices ( ADI ), Qualcomm ( QCOM ), Broadcom ( AVGO ), ON Semiconductor ( ON ) and Microchip ( MCHP ).

Separately on Tuesday, Micron Technology ( MU ) said it would invest $40B through the end of the decade in the U.S. to build leading-edge memory manufacturing in multiple phases .

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