Chip Stocks Slide 3.37% Again as Oil Plunges Over 7%; TAIEX Futures Drop 917 Points Overnight

Memory and AI chip stocks keep falling; Nasdaq-100 enters a correction

Japanese memory maker Kioxia's outlook fell short of expectations: Micron fell 5.78%, Seagate 7.88%, Western Digital 7.52% and SanDisk 6.59%. AI-related stocks also stayed under pressure: Marvell fell 12.7%, AMD 7.52%, and Oracle 8.76% after announcing a $20 billion capital raise. Investors worry that big tech companies keep borrowing and raising money for AI while the payback period stretches out. The SOX is down about 11.6% over three sessions, and the Nasdaq-100 is about 10% below its October high.

Iran signals room for talks; oil plunges over 7%

Iranian President Pezeshkian said the Supreme Leader had given the government authority to pursue peace talks. Trump told reporters he was in no rush to decide whether to resume military action and wanted to give diplomacy another chance, while Qatar is working to restart direct US–Iran talks. WTI crude fell 7.36% to $96.46 a barrel and Brent fell 7.63% to $104.77. Iran's foreign minister said no agreement has been reached yet, so the outlook remains uncertain.

Apple beats expectations, but its margin outlook is cautious

Apple's fiscal fourth-quarter revenue (quarter ended Sep 26) was $114.5 billion, up 12%, and earnings per share were $2.10, both above expectations; iPhone revenue was $57.58 billion, up more than 17%, and Greater China revenue rose 21%. It was the first report under CEO John Ternus. But Apple guided to a 45% to 46% gross margin this quarter, below expectations, and services growth slowed; the stock fell in after-hours trading.

US manufacturing growth speeds up; rate-hike expectations stay high

The ISM October manufacturing index rose to 55.5 from 54.5 in September, above the 54.6 expected, its 10th straight month of expansion; the production index hit 59.0, the highest since November 2021. The prices index eased from 77.9 to 75.2 but remains high. With the economy still resilient and inflation pressure lingering, markets see about a 76% chance of a Fed hike in December.

The selling in US chip stocks over the past three sessions started with Intel's weak PC demand on Friday and spread to memory and AI infrastructure stocks on Monday, driven by doubts about whether AI spending will pay off. The Taiwanese industries most directly connected are memory, foundry and the AI server supply chain: Kioxia and Micron are peers of Taiwan's memory makers, and AMD and Marvell are customers or peers of TSMC and of Taiwan's chip packaging and chip design companies. TSMC's ADR fell 1.85% overnight, less than the SOX, and its premium narrowed from about 13.5% on Friday to about 11.5%. Separately, Apple's iPhone revenue grew more than 17%, which relates to Taiwan's iPhone assembly and component supply chain, while the plunge in oil relates to costs for refining and airlines, two industries that moved in opposite directions on Nov 2 as oil rose. How Taiwan actually trades today will be updated after the 1:30 PM close.