Chip-equipment makers are getting little relief even as TSMC keeps spending, with Applied Materials, Lam Research and ASML all sliding sharply as investors dump semiconductor names on a hotter inflation print and a stronger dollar.
TSMC Spending Meets Chip Equipment Selloff
TSMC
The selloff underscores how quickly macro pressure can overwhelm the sector’s biggest growth engine: AI-driven fab investment. TSMC is still spending heavily on capacity, but Adalytica’s TSMC earnings sentiment has plunged to 11, labeled “Extreme Fear,” even as awareness stays at 93, suggesting investors are still focused on execution risk, cost inflation and timing rather than the scale of orders.
Sentiment Indicators
Applied Materials closed at $408.94 on Oct. 21, down from $413.11 a day earlier and far below its recent peak above $722 in late June. The stock is now below its 50-day moving average of $474.95 and sits under its 200-day average of $440.48, while RSI readings at 12.8 point to deeply oversold conditions.
Lam Research fell to $260.81, from $263.45, and remains well under its 50-day average of $306.26. ASML ended at $1,676.69, up modestly on the day, but is still below its 50-day average of $1,733.25 after a steep pullback from its June high near $1,986.87.
The broader setup is awkward for investors. Strong AI demand from Nvidia continues to support the long-term equipment thesis — Adalytica puts NVIDIA earnings sentiment at 89, or “Extreme Greed” — but the immediate trade has turned defensive as the S&P 500 signal sits at 5, or “Extreme Fear,” amid inflation concerns and a rising dollar.
That leaves chip toolmakers caught between a secular spending cycle and a market that is increasingly unwilling to pay up for it. The next read on inflation, TSMC’s spending pace and any update on foundry capex will help determine whether this is a reset in valuation or the start of a deeper de-rating across semiconductor equipment.
| Entity | Gains | Losses |
|---|---|---|
| TSMC | ▲Capacity buildout progress | ▼Higher capex scrutiny |
| Applied Materials | ▲None | ▼Sharp valuation reset |
| Lam Research | ▲None | ▼Loss of momentum |
| ASML | ▲Long-term EUV demand | ▼Near-term multiple pressure |
