Chip Stocks Sink as Inflation Woes Boost US Yields: Markets Wrap The recent decline in chip stocks has left investors perplexed. Two key contributors to this erosion of value are inflation and interest rate hikes.
As the cost of living rises, consumers reduce their spending on discretionary items like electronic devices, which rely heavily on semiconductors.
This decrease in demand has a ripple effect throughout the supply chain, causing manufacturers to reassess production levels.