BUZZ-US chipmakers fall on fresh US-Iran tensions, profit-taking in memory firms

Shares of U.S. chipmakers fell in premarket trading, tracking weakness in the sector globally.

Over the weekend, Tehran said it had closed the Strait of Hormuz again following renewed fighting with the U.S., which sent oil prices higher and dented risk appetite.

U.S.-listed shares of SK Hynix SKHY.O dropped 9% as investors booked profits after an over 12% surge in their Nasdaq debut on Friday.

Memory chipmakers Micron Technology MU.O fell 5.2%, Western Digital WDC.O and Seagate Technology STX.O lost 5.6% and 4% respectively, while Sandisk SNDK.O fell 6.5%.

Analysts expect the upcoming earnings season to be a test for stretched valuations in the sector, which could sustain or temper the eye-popping rally this year.

Shares of AI chipmaker Nvidia NVDA.O fell 1.3%. Networking chipmakers Broadcom AVGO.O and Marvell Technology MRVL.O slipped 1.7% and 2.5% respectively, while smartphone chipmaker Qualcomm QCOM.O lost 2.2%.

Advanced Micro Devices AMD.O and Intel INTC.O, which make chips for personal computers, servers and AI chips, declined 2.6% each.

U.S.-listed shares of contract chipmaker Taiwan Semiconductor Manufacturing TSM.N were little changed, as it posted a record second-quarter revenue, cushioning the blow.

Shares of chip-making equipment companies like Applied Materials AMAT.O, Lam Research LRCX.O and KLA Corp KLAC.O also fell over 3% each.

The iShares Semiconductor ETF SOXX.O was down 2.6%, while the VanEck Semiconductor ETF SMH.O was off 2%.

The Philadelphia Semiconductor Index .SOX has added over 83% YTD as of last close vs a 10% gain in the benchmark S&P 500 .SPX.