Semiconductor Sector: Downturn Continues Amid Kimi K3 and AI Race

The semiconductor sector faced renewed shock with China's Moonshot AI model Kimi K3 launch. Global AI competition, coupled with U.S. security concerns, has driven down sector values. The PHLX Semiconductor Index (^SOX) dropped 9.5% last week, with Nvidia (NVDA) down 2%, AMD (AMD) 1.5%, and TSMC (TSM) facing higher-than-expected capex expectations. Alphabet's (GOOG) delayed Gemini 3.5 Pro model also added pressure. Investors bought the dip in chip stocks, but the weekly decline raised doubts about AI optimism. Hyperscalers' capex plans and earnings performance are now critical for sector resilience. This could shape the long-term growth of semiconductors and the sustainability of the AI ecosystem.