The semiconductor sector is facing a coordinated wave of selling in late July 2026, fueled by a Chinese breakthrough in DUV lithography (Deep Ultraviolet, a chip-etching technique), fears of a memory price peak in 2027, and the amplifying effect of leveraged ETFs. Nvidia, SK Hynix, Micron, AMD, and ASML all tumbled on equity markets.
🔑 Key takeaways
- The VanEck Semiconductor ETF (SMH) lost more than 2% on Monday, with Nvidia, AMD, SK Hynix, and Micron dropping up to 9% intraday.
- ASML fell more than 8% after reports of Chinese mass production of domestic DUV machines.
- In Seoul, SK Hynix plunged 14.65%, Samsung Electronics more than 13%, and Kioxia more than 18%.
- Per Counterpoint Research, SK Hynix leads Micron across every memory segment: 29% vs 22% in DRAM, 57% vs 21% in HBM (High Bandwidth Memory, used in AI servers).
- SK Hynix filed with the SEC for a US listing by 2026, potentially raising up to $10 billion.
A global sell-off shakes semiconductors
Monday July 27, 2026 marked another cold shower for the tech complex. The VanEck Semiconductor ETF (SMH) lost more than 2%, extending Friday’s losses. Advanced Micro Devices (AMD) dropped 5%, Teradyne 4%, and Micron Technology roughly 2%. Shares of Nvidia, AMD, SK Hynix, and Micron fell as much as 9% intraday, according to data compiled by NDTV Profit.
At 12:41 p.m. EDT, AMD traded at $486.75, down 6.74%, Nvidia at $197.44 (-4.54%), Micron at $883.10 (-4.11%), and SK Hynix’s ADR (American Depositary Receipt, a US-traded share representing a foreign stock) at $140.94, a drop of 8.82%.
China’s DUV breakthrough hammers ASML
The selling spread to equipment makers. ASML, the world’s leading immersion lithography vendor (using a liquid layer to etch finer circuit patterns), tumbled more than 8% on Monday after The Information reported that a state-backed Chinese firm had begun mass-producing domestic DUV machines. The news revived fears of a fast-rising Chinese supply chain that could erode Beijing’s dependence on ASML and other Western suppliers. In Europe, ASM International and BE Semiconductor shed 2% to 3% in early trading.
« If Chinese producers increasingly adopt locally produced lithography machines, demand for equipment supplied by ASML and other Western manufacturers could weaken over time. »
Market participant, cited by NDTV Profit
Asia takes the brunt: Seoul, Tokyo, Taipei
Tuesday’s session extended the slide in US equity futures, with Nvidia shedding roughly 1.2% premarket while Intel and AMD lost more than 3% and Micron about 5%. The pressure was sharpest in Asia. At the Seoul close, SK Hynix plunged 14.65%, Samsung Electronics more than 13%, Samsung SDI 11.37%, LG Innotek 16.29%, Seoul Semiconductor 8.78%, and LG Chem 7.5%.
In Japan, Tokyo Electron lost 10.96%, Advantest more than 10%, and SoftBank Group — viewed as a proxy for AI investment through its stake in Arm — fell 4.43%. Kioxia, the Japanese memory maker, dropped more than 18%. In Taiwan, TSMC closed nearly 3% lower. On mainland China, the ChiNext 300 index fell 6.49% and the Hang Seng China Semiconductor Chips index 7.02%.
Memory, AI, and leveraged ETFs: drivers of the sell-off
Three main factors explain the brutal rotation. First, China’s DUV lithography breakthrough directly threatens ASML’s business model and, over time, Western equipment demand. Second, several broker reports noted that memory prices could peak in 2027, stoking concerns about the longevity of the AI capex cycle. Third, Owen Lamont, senior vice president at Acadian Asset Management, pointed out that leveraged products listed in Korea, Hong Kong, and the US mechanically amplify downside volatility.
« Right now, we are facing incredible uncertainty. Nobody knows how this AI process will affect our economy, and I think it’s going to be choppy regardless. »
Owen Lamont, Senior VP at Acadian Asset Management, CNBC
Sundeep Gantori, head of equity investments at Standard Chartered, struck a more measured tone: « The market remains broad enough for multiple players to benefit and coexist. » He expects the memory price peak next year but argues the risk/reward has improved at current valuations.
SK Hynix faces the Wall Street test
Despite the market turmoil, SK Hynix announced it received a « tremendously positive » response from shareholders to its plan for a US ADR listing. The company filed with the SEC in March, targeting a Wall Street listing by 2026 and potentially raising up to $10 billion.
SK Hynix also expects the favorable pricing environment for its HBM chips to persist next year, alongside strong demand from Nvidia for its LPDDR memory (Low Power Double Data Rate, low-power memory for mobile and edge-AI devices) — a combination that could tighten memory supply from 2027 onward.
Memory market share: SK Hynix widens its lead over Micron
| Segment | SK Hynix | Micron |
|---|---|---|
| DRAM (dynamic random-access memory) | 29% | 22% |
| NAND (flash memory) | 18% | 13% |
| HBM (high-bandwidth memory for AI) | 57% | 21% |
Still, Micron and Sandisk each lost more than 6% on Thursday, hit by disappointing Broadcom results and expectations of SK Hynix ramping up its US presence — a double dose of pressure that dragged the broader memory complex into bear-market territory (down more than 20% from recent highs).
Conclusion: an AI cycle under stress, not broken
Despite the depth of the correction, several analysts view the AI capex cycle as structurally intact. Demand for high-performance chips, notably Nvidia’s GPUs (graphics processing units) and SK Hynix and Samsung’s HBM, should continue to support the leading players. Short-term uncertainties — China’s DUV breakthrough, the expected 2027 memory price peak, and leveraged-ETF volatility — will, however, keep weighing on shares in coming quarters.
Two scenarios dominate the medium term. Bull case: hyperscaler demand (Google, Meta, Microsoft, Amazon) stays ahead of supply, equipment vendors such as ASML offset Chinese competition with more advanced EUV (Extreme Ultraviolet) technology, and SK Hynix pulls off its US IPO. Bear case: China accelerates lithographic sovereignty, memory prices collapse in the first half of 2027, and valuations correct by another 30% to 40%. As Sundeep Gantori summarized, « the risk/reward has improved at current valuations » — a technical signal closely tracked by equity desks.
Sources
- CNBC — SK Hynix plunges as semiconductor selloff deepens
- Investor’s Business Daily — Stock Market Today
- Seeking Alpha — AI memory chip stocks dip after SK Hynix drag
- NDTV Profit — China cracks DUV lithography
- Yahoo Finance — Memory stocks dragged into bear market
- Sherwood News — Micron and Sandisk drop on bad news
This article is for informational and educational purposes only. It does not constitute investment advice. Do your own research (DYOR) before making any decision.
