$1.3 Trillion in Market Cap Wiped Out in a Day as Semiconductor Stocks Plunge on New York Exchange, Including Nvidia
Philadelphia Semiconductor Index Plunges 10.3%
On June 5 (local time), the New York Stock Exchange saw semiconductor stocks plummet, wiping out approximately $1.3 trillion (about 2,026 trillion won) in market capitalization in a single day.
According to foreign news sources, the Philadelphia Semiconductor Index, which consists of 30 major semiconductor stocks listed in the United States, plunged by 10.3% on the day. This is the largest decline since March 2020, when the global financial markets were experiencing extreme volatility due to the impact of COVID-19.
Nvidia, a core player in the AI semiconductor market, fell by about 6%, while Micron dropped 13%. As a result, more than $300 billion in market capitalization was wiped out from Nvidia and about $150 billion from Micron. Marvell Technology, which had recently led the upward trend, declined by 17%, and AMD dropped by 11%, respectively. Broadcom also fell by about 8%. The cumulative decline over the past two days approached 20%.
The sharp drop in semiconductor stocks began with Broadcom's quarterly earnings announcement. This was because demand for Broadcom's custom artificial intelligence (AI) chip business fell short of market expectations. Market experts noted that the sell-off in semiconductor stocks was occurring as investor caution toward highly valued tech stocks increased ahead of the mega initial public offering (IPO) of Elon Musk's space company, SpaceX.
Additionally, as U.S. employment data showed a recovery last month, concerns grew that the Federal Reserve (Fed) may raise interest rates within the year, causing investor sentiment to deteriorate rapidly.
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However, despite the steep drop, the Philadelphia Semiconductor Index is still up 73% since the beginning of the year, leading some to view this sharp decline as a correction following an overheated rally.
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