Why did chip stocks fall on Monday?

Why did chip stocks fall on Monday?

After the US Department of Commerce instructed chip makers to stop supplying advanced chips with AI and graphics processing capabilities of 7 nanometers or more to China, the stock price of Taiwan Semiconductor was hit.
The US actions have raised concerns throughout the sector, anticipating further actions from the upcoming US President Donald Trump's administration, attacking both the chip laws in the US and Taiwan, the homeland of Taiwan Semiconductor.

Taiwan Semiconductor is an important supplier for major technology companies such as Apple (NASDAQ: AAPL) and Nvidia.
Monolithic Power Systems (NASDAQ: MPWR) pointed out that semiconductor stocks faced a significant retreat on Monday due to the impact from Edgewater Research analysts.
Analysts pointed out that allocation of Monolithic to Nvidia's Blackwell GPU is at risk due to performance issues with the company's power management IC.

Analysts emphasized that Japanese company Renesas and Germany's Infineon have received urgent orders and may potentially replace Monolithic for Nvidia's B200 and GB200 SKUs.
Edgewater expressed concerns that Monolithic's supply chain partners view Monolithic's temporary solutions as more of a temporary measure rather than a complete solution.

Benzinga on 12th November 2024.