Kioxia Loses Half Its Value

The global semiconductor sector remains under pressure. Shares in Japan’s Kioxia fell 16% in a single trading session and have now lost around half their value since reaching a monthly high.

Other Japanese companies in the industry also suffered sharp declines. Shares in Ibiden, Tokyo Electron and Sumitomo Metal Mining dropped between 8% and 10%.

The US market has also been struggling. The Philadelphia Semiconductor Index, commonly known as the SOX, has fallen roughly 21% from its record high reached on June 22, officially putting it into technical bear-market territory.

Even TSMC’s better-than-expected results and upgraded financial guidance failed to improve investor sentiment. The chipmaker’s shares fell 7%.

According to some financial institutions, the current sell-off is not the result of deteriorating industry conditions. Instead, it is believed to have been driven mainly by investors’ excessive exposure to the sector and widespread profit-taking.

At the same time, Citigroup data shows that some investors are taking advantage of lower valuations. Semiconductor-related exchange-traded funds in South Korea and Taiwan recorded net inflows of approximately $6.4 billion and $2.8 billion, respectively, this week. South Korea’s stock market also attracted around $500 million in net inflows from foreign investors.

Analysts say the decline in semiconductor stocks is largely the result of heavy investor exposure to the sector and the realization of earlier gains, rather than weakening industry fundamentals. However, the correction could also put pressure on other technology stocks, particularly companies linked to chip manufacturing.