Chips | BOH Securities

The chip unwind

The chip unwind. The chip index doubled in the first half of 2026 (Dell +300%, Micron +197%). It fell about 11% in the first two days of July after a weak ASML forecast and an export-control update, lost about 21% in July, partly recovered, then broke lower in October: Barclays downgraded Dell (Oct 14), risk-off selling hit chips (Oct 22), and Intel had its worst day since 1974 (Oct 30). The index closed Wednesday at a new low for the slide, 29.8% below the June 22 peak. A new driver landed the same day: after the midterms (Democrats won both chambers; a Texas governor-elect promising a data-center moratorium), AI and data-center names sold off while the Dow rose about 3%.

Today's slide vs past chip slides

Philadelphia Semiconductor Index (SOX), from each slide's peak.

Older slides are shown because the setup rhymes: a doubling, then a break, then a second leg lower. That happened in 2022 and in 2000.
2018 and 2024-25 bottomed at -26% and -40% after about 190-200 sessions. 2022 bottomed at -46% after about 200. 2000 kept falling for more than two years.
Today's slide is 95 sessions old, about 49% of the way to where those slides found their lows. Depth is in range of 2018; time is not.
Nuance: each of those slides had a different cause (2000: dot-com bust; 2022: rate hikes; 2024-25: AI digestion plus tariffs). The shape can rhyme while the ending differs.