Semiconductor stocks have taken a hit this year, with the VanEck Semiconductor ETF (SMH) down more than 9% so far in 2025. In contrast to its strong performance over the past two years, SMH has lost about 11% in the past month alone. A bearish chart pattern is forming, with the fund’s 50-day moving average below its 200-day counterpart, indicating further declines.
The decline is partly due to rising global trade tensions. The US recently imposed tariffs on Canadian, Mexican, and Chinese imports, prompting Canada and China to retaliate. Even if components are assembled in the US, many semiconductors still rely on imported parts, making it challenging for policymakers to devise a tariff policy around carve-outs.
According to Chris Miller, professor at Tufts Fletcher School, “The complexity of supply chains makes devising a tariff policy around carve-outs very difficult.” The industry is hoping for minimal changes as they have been structured around the assumption that tariffs will not significantly impact global trade.
The worst-performing SMH members this week are Marvell Technology (-21.3%), Intel (-12.6%), Nvidia (-11.5%), Broadcom (-10%), and On Semiconductor (-6.7%).
Source: https://www.cnbc.com/2025/03/06/chip-stocks-just-formed-a-worrying-chart-pattern.html