The VanEck Semiconductor ETF dropped 5.9 percent on Thursday to close at 466.50 euros, driven by
- The VanEck Semiconductor ETF dropped 5.9 percent on Thursday to close at 466.50 euros, driven by industry warnings of long-term component shortages while drawing 1.37 billion dollars in...
- The sell-off in the chip sector stemmed from comments made by Lam Research CEO Tim Archer.
- The warning dampened market sentiment across the entire sector.
The VanEck Semiconductor ETF dropped 5.9 percent on Thursday to close at 466.50 euros, driven by industry warnings of long-term component shortages while drawing 1.37 billion dollars in capital inflows. While warnings of protracted supply bottlenecks weighed on semiconductor sector prices, massive capital inflows signaled continued high investor interest in the sector.
Lam Research CEO warns of supply chain bottlenecks until 2027
The sell-off in the chip sector stemmed from comments made by Lam Research CEO Tim Archer. During a conference call on recent earnings, Archer stated that supply chain constraints for specific components could persist deep into 2027. These restrictions limit the ability of chipmakers and equipment suppliers to fully meet end-market demand.
The warning dampened market sentiment across the entire sector. The VanEck Semiconductor ETF, traded under the ticker SMH, fell sharply on Thursday and now sits 6.5 percent below its 50-day moving average of 498.75 euros.
Chinese tech giants order millions of Nvidia graphics cards
Despite supply constraints, demand for high-performance hardware remains strong. Reuters reported that Chinese technology firms ByteDance, Alibaba, and Tencent collectively ordered more than three million units of Nvidia’s RTX PRO 5500 graphics card. The list price value of these orders exceeds 35 billion US dollars.
Nvidia informed customers that it cannot guarantee order fulfillment because demand outpaces planned production volume. This discrepancy is the central dilemma facing the industry: order books remain full while physical component availability acts as a bottleneck. This discrepancy between massive order volumes and limited delivery capability illustrates the industry’s current dilemma: order books are indeed packed full, but the physical availability of components remains the critical bottleneck.
Investors pour 1.37 billion dollars into the fund during the dip
Many investors treated the Thursday price decline as a buying opportunity rather than a reason to exit. The VanEck Semiconductor ETF pulled in net inflows of approximately 1,365.69 million US dollars on Thursday alone.
The fund tracks the performance of the world’s largest semiconductor companies. Long-term momentum driven by artificial intelligence capacity expansion and data center upgrades continues to attract capital despite short-term production friction. While current volatility cautions investors, long-term momentum driven by the expansion of AI capacities and the modernization of data centers remains a central driver.