2-8-2024 (SANTA CLARA) Intel shares plummeted nearly 30% on Friday morning after the American technology stalwart announced a series of devastating measures, including hefty layoffs, dividend cuts, and disappointing earnings. The chipmaker’s woes have set the stage for what could be its worst trading day in decades, and the ripple effects have ignited a massive selloff of semiconductor stocks worldwide.
Intel’s bombshell announcement included plans to slash over 15,000 jobs, representing a staggering 15% of its workforce, and the scrapping of its dividend payment. The company also reported a loss of $1.6 billion in its second quarter and issued a pessimistic forecast for the third quarter, further compounding investor concerns.
The plunge continues a downward trend for Intel that began the previous day, when shares were already down 5.5% at market close. If the losses hold, the storied U.S. chipmaker is on course for its worst selloff since the year 2000.
The Intel selloff has triggered a global semiconductor stock rout, with Asian heavyweights bearing the brunt of the fallout. Samsung Electronics, Taiwan Semiconductor Manufacturing Company (TSMC), and SoftBank Group, the parent company of British chip designer Arm Holdings, respectively fell 4.2%, 5.9%, and 8% at market close in Seoul, Taipei, and Tokyo.
South Korea’s SK Hynix and Japan’s Tokyo Electron, which supply memory chips and machinery to giants like Nvidia, Intel, and Samsung, fared even worse. SK Hynix shed 10.4% in its worst daily drop in 13 years, while Tokyo Electron plunged 12% by market close.
European chipmakers were not spared, with Dutch firm ASML, a manufacturer of tools required for advanced computer chip production, down nearly 10% during trading hours in Amsterdam. Nasdaq-listed Arm Holdings dropped nearly 10% on Friday morning after closing nearly 16% down on Thursday, following a conservative forecast that marked the company’s worst day in four years.
U.S. firms are also bracing for a bruising day, with chipmaking giant Nvidia down nearly 6% shortly after markets opened on Friday, compounding its nearly 7% decline on Thursday. Other companies like Broadcom, KLA Corp, Qualcomm, Lam Research, Applied Materials, and Marvell were similarly down between 2% and 4%.
