About $1.5 trillion in chip stock value has evaporated since late June, and the fallout is rippling into crypto markets
The semiconductor sector, which spent the better part of two years as Wall Street’s golden child, is now getting the cold shoulder. The Philadelphia Semiconductor Index, known as SOX, has shed over 11% from its June 2026 high. Memory-chip giants Micron, Samsung, and SK Hynix have already crossed the dreaded 20% decline threshold, officially putting them in bear market territory as of July 7.
Roughly $1.5 trillion in semiconductor market value has been wiped out since late June 25. For context, that’s more than the entire GDP of Spain, gone in about two weeks.
The AI hype cycle hits a wall #
The SOX index had been on an absolute tear, climbing approximately 83% on the back of insatiable demand for AI chips.
Growing concerns about sky-high valuations started to take hold. Analysts began questioning whether AI-related infrastructure spending could sustain its breakneck pace. Major memory manufacturers have also started pivoting toward lower-margin products.
Micron has been hit particularly hard, accounting for nearly $350 billion of the sector’s total decline. Samsung, meanwhile, posted a record operating profit of $59 billion and sales reaching $113 billion. Its stock dropped anyway.
The crypto connection #
Research from CoinDesk identified a notable pattern: during the earlier peaks in chip stock performance, investors pulled as much as $3.4 billion from Bitcoin exchange-traded funds.
When AI chip stocks were soaring, money was flowing out of crypto and into semiconductors. Bitcoin ETFs tend to see outflows when a competing narrative, like AI infrastructure, captures Wall Street’s attention.
What this means for investors #
The SOX index needs to fall roughly another 9 percentage points from current levels to officially enter bear market territory. Memory chips are already there. For crypto traders, the key metric to watch isn’t necessarily chip stock prices themselves, but Bitcoin ETF flow data in the coming weeks. If inflows accelerate as semiconductor stocks falter, it would confirm the rotation thesis that’s been building since late June.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our