Philadelphia Semiconductor Index falls more than 4%, chip sector remains mixed

The Philly Semiconductor Index is down as chip stocks react to the fallout of government export controls.

Video transcript

JARED BLIKRE: Welcome back. Chipmakers still flashing warning signs with the latest headlines from Taiwan Semi adding to the gloom. The Taiwanese group cutting its budget for 2022, but shares higher on better than expected results. For more, we have Yahoo Finance's Ines Ferre. Ines, more gloom for the chip sector under a lot of pressure already.

INES FERRE: Yeah, that's right. And if we look at the Philadelphia Semiconductor Index, I mean, right now, it's rebounding. But it had opened lower. It was down as much as 4% earlier today. And a four-day chart will show you that it's down 5%, and a year to date chart shows it is down 43%.

But let's get to that chip sector that you were just mentioning. And TSMC, that it beat on the top and the bottom line, cutting capital spending and also warning about slowing consumer demand. So moving into the fourth quarter, TSMC warning that it's seeing demand flattish. Right now, it's rebounding. The stock is up 7%.

But I also just want to mention that, look, the chip sector has been dealing with the fallout of the new government regulations, the Biden administration's export controls. So you've got Applied Materials, Lam Research, Applied Materials saying that their fourth quarter is going to be impacted by this new regulation. So you've got this regulation on the one hand, and then you've got some of these chip makers that are talking about slowing consumer demand, on the other hand, impacting.

And keep in mind that the chip sector also is going through periodic cycles. So it was expected that in the second half of the year, that we would see demand slowed down, slower. And it's-- these stocks are such that they've kind of been the way the pandemic style stocks have been-- really high during the pandemic and then losing steam this year. Jared.

JARED BLIKRE: Hey, we don't need any nuance on that. We know the hit that they've been taking, and a lot of green on that board. It was red quite a bit earlier. All right, Yahoo Finance's Ines Ferre, thank you for that report.