U.S. Chip Stocks Recover, Aided by Rally in Chinese Semiconductor Sector

U.S. semiconductor stocks staged a recovery in premarket trading Thursday, taking cues from a sharp rally in Chinese chipmakers ahead of a highly anticipated initial public offering. The gains reverse some of the losses from earlier in the week, when the sector was hit by a broad selloff that raised questions about the durability of the AI-driven rally.

U.S. Stocks Rebound

Several major U.S. chip and technology firms saw significant gains in premarket trading as of 05:41 ET, according to Investing.com. The recovery was broad-based across the sector:

• Applied Materials (AMAT) rose 3.8%.
• Micron Technology (MU), Intel (INTC), Coherent (COHR), and Marvell Technology (MRVL) each climbed more than 3%.
• Lumentum Holdings (LITE) added 2.7%, while Advanced Micro Devices (AMD) gained 2.2%.

This positive momentum provided a lift to investor sentiment after a volatile start to the week for the semiconductor industry.

Rally in China Provides Lift

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The catalyst for the rebound appeared to originate in China, where the CSI Semiconductor Index closed up a remarkable 8.8%. Enthusiasm in the Chinese market is building for the upcoming Shanghai IPO of Changxin Memory Technologies (CXMT), a leading domestic memory chipmaker.

CXMT, the world's fourth-largest maker of DRAM chips, announced it would begin book-building on July 15 for an offering that aims to raise 29.5 billion yuan, or approximately $4.34 billion. The company held about 7.7% of the global DRAM market last year, and its public debut is being closely watched by global investors.

Context: Reversal After Samsung-Led Selloff

The recovery comes just two days after a global selloff in chip stocks, which was triggered by an unexpected drop in Samsung Electronics shares. The decline occurred despite the South Korean tech giant reporting preliminary second-quarter operating profit that was nearly 19 times higher than the previous year and beat analyst estimates.

Although Samsung's results were strong, some analysts suggested the positive news was already priced into the stock. The negative reaction also reflected broader investor concerns about whether the high prices for memory chips and the powerful, AI-fueled demand that has driven the sector's rally over the past year can be sustained.