The darkest recession in a decade for an extremely promising sector

in the United States The Philadelphia Semiconductor Index fell 4.6 percent on Tuesday, with all 30 of its members posting losses, the biggest decline in two months. In Asia, chip companies ranging from Taiwan Semiconductor Manufacturing Co. (TSMC) toSamsung Electronics Co., SK Hynix Inc. and Tokyo Electron Ltd. – shares fell. Investors are increasingly worried that the clearly cyclical industry is headed for a long-term downturn after several years of large-scale shortages that have forced significant investment in capacity.

“We continue to believe we are headed for the semiconductor industry’s darkest recession in a decade and possibly since 2001, given forecasts for a recession and inventory build-up,” Citigroup Inc. analyst Christopher Danely wrote in a note. “We predict that every company in our coverage and every end market will experience corrections.”

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