TXN - Micron AMD lead semiconductor stocks lower to end strong week

2023-06-16 12:04:43 ET

AMD ( NASDAQ: AMD ) and Micron Technology ( NASDAQ: MU ) were among the weakest semiconductor stocks on Friday as investors took some gains in the sector following a strong week.

AMD ( AMD ) slipped 2.7% as Morgan Stanley said competitor Nvidia ( NVDA ) was its top semiconductor stock due to the latter's upside stemming from artificial intelligence.

Nvidia ( NVDA ) rose 1.5% as the Jensen Huang-led company continued to add to its year-to-date gains which have surpassed 200% .

Micron ( MU ) fell almost 2% after the company said that approximately half of its revenue from China is at risk of being lost.

"As previously disclosed, Micron’s revenue with companies headquartered in mainland China and Hong Kong, including direct sales as well as indirect sales through distributors, is approximately a quarter of Micron’s worldwide revenue and remains the principal exposure," Micron said in an 8-K filing, referencing the ongoing review by China's Cybersecurity Administration over its products in the country.

"We now believe that approximately half of that China HQ customer revenue, which equates to a low-double-digit percentage of Micron’s worldwide revenue, is now at risk of being impacted."

Separately on Friday, Micron ( MU ) said it would invest roughly $604M in China over the next few years at its chip packaging facility in Xian.

It was also reported that the Boise, Idaho-based company is nearing a deal to commit approximately $1B billion to build a similar factory in India.

Chip equipment makers Applied Materials ( NASDAQ: AMAT ) and ASML Holding ( NASDAQ: ASML ) fell roughly 2% each after the pair were downgraded by New Street Research.

Analyst Pierre Ferragu lowered his rating on both stocks to neutral, citing a muted outlook and elevate earnings multiples that leave little room for upside.

Lam Research ( LRCX ) and KLA Corp. ( KLAC ), which compete with Applied Materials ( AMAT ) and ASML Holding ( ASML ) in the semiconductor equipment space, fell in sympathy.

Intel ( INTC ) shares rose nearly 1% after the company disclosed plans to build a $4.6B plant in Poland for chip production.

The company is also said to be putting the finishing touches on a deal with the German government to expand into that country.

Other chip stocks were mixed on Friday, as Qualcomm ( QCOM ), Texas Instruments ( TXN ) and Analog Devices ( ADI ) fell fractionally, while NXP Semiconductors ( NXPI ), Skyworks Solutions ( SWKS ) and Monolithic Power Systems ( MPWR ) eked out modest gains.

More on semiconductors

• Nvidia And AMD Paint The Same Growth Picture
• AMD retains rating at Wells Fargo despite no big customers named for new AI chip
• Citi: Don't worry about Big Tech fueling 2023's rally. Worry about earnings instead.

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