FormFactor, Penguin Solutions, Western Digital, Applied Materials, and KLA Corporation Shares Plummet, What You Need To Know - Yahoo Finance

On July 7, 2026, the semiconductor industry experienced a significant market correction, with shares of FormFactor, Penguin Solutions, Western Digital, Applied Materials, and KLA Corporation plummetin... Read original →

This semiconductor selloff reflects market repricing of AI supercycle euphoria, not deteriorating fundamentals. Samsung’s blowout earnings ironically triggered profit-taking, revealing investor wariness of overvalued near-term expectations. DeepSeek’s in-house inference chip—though constrained by U.S. bans on EUV and sub-3nm nodes—signals a strategic pivot toward modular, Chiplet-based AI silicon that bypasses NVIDIA’s full-stack dominance. This accelerates pressure on U.S. equipment makers like Applied Materials to commercialize 2nm and High-NA EUV support stacks, while boosting bargaining power for foundries in Taiwan, China and Korea in advanced packaging. Geopolitical compliance is now baked into R&D costs, with supply-chain redundancy becoming standard in HBM4 and Jalapeño-class accelerator development. Over the next 12–24 months, only firms with vertical integration in custom AI inference IP and heterogeneous integration will attract sustained capital; undifferentiated memory and equipment players face structural headwinds.