U.S. Chip Stocks Plunge as AI Spending Fears and Chinese Tech Advances Shake Market

U.S. chip stocks fall as AI spending concerns and Chinese tech progress spark market jitters, hitting major firms hard.

October 13, 2026 One Min Read

POLICY WIRE — Singapore, Singapore — U.S. semiconductor shares declined sharply on Tuesday, with memory-focused companies suffering the most as reports of a breakthrough by China’s CXMT intensified competition fears and added to unease over rising AI spending.

The sell-off in Asian markets erased an estimated $5.5 billion from SoftBank founder Masayoshi Son’s wealth, while major U.S. chipmakers like Nvidia and Micron saw declines in premarket trading. The downturn reflects growing anxieties over both the sustainability of AI investment and the increasing challenge posed by Chinese competitors in the memory chip sector.

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Investors are increasingly wary of the long-term viability of AI-driven growth, with high expectations for infrastructure spending making sector rallies more susceptible to profit-taking. SK Hynix, a key supplier of high-bandwidth memory chips to Nvidia, has been particularly affected, as its stock remains vulnerable to shifting investor sentiment.

Reporting by Policy-Wire (PW)

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