Semiconductor shares have endured a jarring two days. Chip stocks slumped on Tuesday as investors fretted over rising Chinese competition and the cost of financing the artificial-intelligence boom — only for ASML to report record quarterly results on Wednesday suggesting order books remain stronger than the sell-off implied.
The rout began in Asia. Samsung fell 7.4 per cent and SK Hynix dropped more than 10 per cent on Tuesday, after Chinese memory maker CXMT announced key progress on a 4F2 DRAM architecture due by the end of 2026. The weekend announcement by CXMT president Cao Kanyu rattled investors because the two Korean giants are pursuing the same 4F-square designs to replace today’s 6F-square structure. Morningstar’s Jing Jie Yu said the news had disrupted expectations around development timelines and intensified fears of cheaper Chinese technologies.
The weakness spread west. In Europe, ASML fell 3.1 per cent on Tuesday while STMicroelectronics and Infineon dropped roughly 5 per cent each; Micron and SanDisk extended Monday’s declines, according to Morningstar’s account of the sell-off. AI-financing worries added fuel: Broadcom’s chief executive likened AI investing to a “casino”, while Intel and Broadcom executives warned that access to capital could constrain industry expansion.
ASML answers with record numbers
Then came Wednesday’s counter-evidence. ASML posted record third-quarter results — net sales of 11.7 billion euros, up 55 per cent year on year, net income of about 5.0 billion euros and a record gross margin of 57.5 per cent — according to CMC Markets’ earnings summary. The Dutch lithography giant, the sole commercial supplier of extreme ultraviolet machines, also raised full-year 2026 revenue guidance to 44-45 billion euros, its third upward revision this year.
The most striking signal came from chief executive Christophe Fouquet, who said planned supply for 2027 and 2028 will not fully meet customer demand, with some chipmakers already eyeing orders for 2029 and 2030. The paradox is the story: memory stocks are being repriced on Chinese competition fears, while the company selling the machines every leading chipmaker needs cannot build them fast enough.
What the whiplash means for investors
For portfolio holders, the two-day sequence is a stress test because the fears point at different parts of the value chain: the CXMT news threatens pricing power in memory — a market where memory costs have already bitten hardware makers this quarter — while ASML’s order book signals a capacity shortage in advanced equipment. The open question is whether this is a genuine demand problem or simply a repricing of the most richly valued names — a question the last chip-stock slide on these pages left open. For now, ASML’s record quarter suggests the AI build-out still has a long backlog behind it.
