Semiconductor Stocks: Wrapping Up Their Performance This Year



This year brought market sell-offs

This year has been a rollercoaster for the semiconductor industry, with the US-China trade war and the Fed’s interest rate hike prompting market sell-offs in four months—February, March, October, and December. These sell-offs sent the SPDR S&P 500 Trust ETF (SPY) down 11.8% this year, and the VanEck Vectors Semiconductor ETF (SMH) down 18%.

The semiconductor industry, which has heavy exposure to China, was among the hardest hit. Some industry- and company-specific news also determined stocks’ performance.

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Top performers this year

Amid the semiconductor industry’s weakness, two stocks outperformed others this year: Advanced Micro Devices (AMD), which rose 54%, and Xilinx (XLNX), which rose 20%. AMD stock rose on news that rival Intel (INTC) was facing a CPU (central processing unit) supply shortage, and that AMD’s manufacturing node was set to move ahead of Intel’s with the launch of its 7nm (nanometer) server processors in early 2019.

Xilinx stock started rising on October 24 with the announcement of the company’s quarterly results. The company reported ~20% sequential growth in the data center and communication markets due to early deployment of 5G (fifth-generation) infrastructure.

This year’s underperformers

Weakness in the semiconductor market dragged down several stocks this year. NVIDIA (NVDA) topped the list, falling 35%. Marvell Technology (MRVL) and Micron Technology (MU) closely followed, falling 34% and 32%. Qualcomm (QCOM) also fell significantly.

NVIDIA fell as the crypto bubble burst and its latest raytracing-enabled graphics cards faced technical issues, and Micron stock fell as the two-year-long memory upturn ended and memory prices began to fall. Qualcomm stock fell as it lost Apple’s (AAPL) iPhone modem orders amid the companies’ ongoing licensing dispute. In this series, we’ll look at what 2019 could bring for semiconductor stocks.

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