Semiconductor stocks surged Thursday, tracking an 8.8% rally in Chinese chip shares fueled by Changxin Memory Technologies' $4.34 billion Shanghai IPO plans.
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US chip stocks rebound 3% as China semiconductor rally lifts sector
Semiconductor stocks surged Thursday, tracking an 8.8% rally in Chinese chip shares fueled by Changxin Memory Technologies' $4.34 billion Shanghai IPO plans.
US chipmakers rebounded sharply in premarket trading, recovering some of the ground lost after Samsung Electronics' forecast-beating results triggered a sector-wide selloff earlier this week. Micron Technology, Intel, Coherent and Marvell Technology each climbed more than 3% by 5:41 a.m. ET, while Applied Materials rose 3.8% and Advanced Micro Devices gained 2.2%.
"The China semiconductor rally is providing a much-needed bid after the Samsung profit-taking shook confidence," said Rachel Kim, semiconductor analyst at Edgen. "Changxin's IPO is a reminder that memory demand remains structurally strong, even if near-term positioning got overextended."
The CSI Semiconductor Index closed up 8.8% after Changxin Memory Technologies, the world's fourth-largest DRAM maker with about 7.7% global market share, said it would begin book-building July 15 for a Shanghai IPO aiming to raise 29.5 billion yuan, or roughly $4.34 billion. The move reignited enthusiasm for chip stocks across Asia and spilled into US premarket trading, with South Korea's Kospi closing 0.6% higher as SK Hynix rose 5.3% and Samsung gained 0.8%.
The rebound comes just two days after a brutal selloff sparked by Samsung's preliminary second-quarter results. The South Korean giant reported operating profit of 89.4 trillion won ($58.44 billion) — nearly 19 times higher than a year earlier and exceeding the LSEG SmartEstimate of 87.3 trillion won. Revenue jumped 129% to 171 trillion won. Yet Samsung shares fell sharply as investors locked in profits following the stock's red-hot rally, raising broader questions about whether the artificial-intelligence-driven demand that has powered the chip sector's surge can sustain elevated pricing.
The Memory Price Question
Memory chip prices have risen sharply over the past year, and the Samsung selloff highlighted growing investor anxiety about demand durability. The PHLX semiconductor index remains down about 15% from its record high in late June, while Micron has dropped more than 20% since hitting its own peak on June 25. Despite the pullback, the index is still up roughly 75% year-to-date, and Micron has more than doubled.
The so-called hyperscalers — Microsoft, Meta Platforms and Alphabet — are under increasing scrutiny as earnings season approaches. Their capital expenditure plans for AI infrastructure directly determine revenue visibility for chipmakers. A slowdown in spending growth could pressure the lofty valuations that semiconductor stocks command. Intel, which reports second-quarter results on July 23, guided for non-GAAP earnings per share of $0.20 on revenue of $14.3 billion at the midpoint — an 11% year-over-year increase and a sharp turnaround from the $0.10 per-share loss it posted a year earlier. Analysts expect full-year 2026 EPS of $1.09, a 161% surge from 2025.
What's at Stake for Investors
The semiconductor sector has added nearly half of the S&P 500's market value gains this year, according to JonesTrading data. But the speed of the rally has fueled debate about sustainability. Intel trades at 904 times trailing earnings, though its forward multiple of 137 reflects expectations of a dramatic earnings recovery. On Stocktwits, retail sentiment was neutral on Micron and the Roundhill Memory ETF, while bearish on Intel and AMD — a cautious posture ahead of earnings.
The key question for the weeks ahead is whether the China-driven rebound has legs or represents a dead-cat bounce before another leg lower. Changxin's IPO will test investor appetite for memory exposure at a moment when the sector's valuation has rarely been higher. If the offering prices successfully, it could validate the bull case that AI-driven memory demand has further to run. If it stumbles, the selloff that began with Samsung may not be over.
This article is for informational purposes only and does not constitute investment advice.
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