Semiconductor equipment and upstream chip clusters’ downward trend has paused, showing a lower-volume consolidation.

After ASML and AVGO went through a sharp nearly 10% correction in the Philadelphia Semiconductor Index last week, trading volatility has eased.

Earlier, although top-tier foundries such as TSMC had put forward strong capital expenditure outlooks, the market’s bar for “good news being cashed in” has been extremely strict because chip stocks had accumulated a huge rally beforehand.

The market is currently in a transition phase from simply relying on valuation expansion to requiring hard support from profit growth. As Wall Street institutions such as Citi noted, as targets like Broadcom’s weight share in the index increases, investors’ scrutiny of the AI supply chain has expanded from just GPUs to include customized ASIC chips, optical modules, and network connectivity architectures.
‍$ASML $AVGO

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