U.S. Chip Stocks Plunge on AI Spending Concerns; Philadelphia Semiconductor Index Down 4.29% on July 16

According to market analysts, on July 16, chip stocks declined sharply amid investor concerns about whether massive artificial intelligence capital expenditures would generate sufficient returns to justify current valuations, with deteriorating U.S.-Iran tensions further dampening risk appetite.

The Philadelphia Semiconductor Index tumbled 4.29%, while the Nasdaq Composite fell 1.47% and the S&P 500 declined 0.51%. TSMC ADR dropped 2.32%, and SK Hynix ADR plummeted 13.55% despite TSMC's better-than-expected Q2 earnings and raised 2026 capital expenditure guidance of $60–64 billion, up from the prior $52–56 billion estimate. Micron, AMD, and Broadcom each fell over 5%, with broader semiconductor weakness reflected in the VanEck Semiconductor ETF declining nearly 4%.