Chip stocks including Micron (MU), Applied Materials (AMAT), and Intel (INTC) were down in pre-market trading at the time of writing on Monday amid fears of an escalation of trade wars between the U.S. and China after China banned its key infrastructure operators from buying products from Micron.
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Following the ban, Micron stated at a J.P. Morgan conference call that it expects this ban to impact its revenue in the low-single to high-single-digit percentage. The company added, “We estimate that the combined direct sales and indirect sales through distributors to China headquartered companies is about 1/4 of our total revenue.”
Meanwhile, the chipmaker Applied Materials stated on Monday that it plans to invest $4 billion in a research center in Sunnyvale, California to advance semiconductor manufacturing. This center will likely be ready in 2026 and will create up to 2,000 engineering jobs.
Even with today’s sell-off of chip stocks, semiconductor stocks have had a good year so far with the iShares Semiconductor ETF (SOXX) surging by more than 25% year-to-date.
