AI Semiconductor Rally Ends... $4.5 Billion in Market Value Vanishes from U.S. Chip Stocks

Microchip Technology (Nasdaq: MCHP) tumbled 9.14% on May 5, closing at $87.49. Trading volume exceeded 15.25 million shares, and the company’s market capitalization plunged by about $3.9 billion—roughly KRW 5 trillion—in a single day, making it one of the hardest-hit names during the recent correction across AI‐related semiconductor stocks.

On May 7, the company released its fourth‐quarter and full‐year fiscal 2026 results, stating that inventory adjustments were stabilizing and providing guidance that June‐quarter revenue would increase by more than 35% year-over-year. This outlook fueled investor optimism over demand for its high-speed connectivity products for data centers and AI applications. Earlier this month, a leading U.S. brokerage conference spotlighted projections that data‐center revenue could grow to about $500 million this year, triggering a short-lived surge in the stock. However, the latest decline is seen as part of broader profit-taking and heightened volatility in the semiconductor sector.

Headquartered in Chandler, Arizona, Microchip Technology designs microcontroller (MCU) and analog semiconductor chips, primarily serving embedded control applications in automotive, industrial equipment, and communications infrastructure. Since its 1993 Nasdaq listing, the company has expanded its portfolio and its industrial and defense solutions through aggressive mergers and acquisitions, most notably the approximately $10 billion purchase of Microsemi in 2018.