What Happened?
A number of stocks fell in the afternoon session after a broad-based sell-off hit the semiconductor sector following news of a potential strike at Samsung and a stake sale by Taiwan Semiconductor Manufacturing (TSMC), which rattled global chip supply chains.
These events highlighted significant supply-chain risks, triggering a sharp reversal across the chip industry. Adding to the sector's weakness were rising valuation concerns, inflation fears, and broader market jitters that led to renewed selling pressure on major companies like NVIDIA, Intel, and Micron Technology.
Furthermore, ongoing supply constraints for rare earth materials, which are used in semiconductor manufacturing, reportedly caused delays and higher input costs for firms in the sector, compounding the negative sentiment for chip-related stocks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Analog Semiconductors company Monolithic Power Systems (NASDAQ: MPWR) fell 4.8%. Is now the time to buy Monolithic Power Systems? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Allegro MicroSystems (NASDAQ: ALGM) fell 4.4%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it’s free.
Zooming In On Monolithic Power Systems (MPWR)
Monolithic Power Systems’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 3.1% after the U.S.-China summit concluded without any significant breakthroughs on semiconductor sales to the country.
Expectations had been building for a potential deal, particularly regarding Washington's authorization for Nvidia to export its H200 chips to China. However, the summit ended without a formal approval for the shipments from Beijing. This lack of progress disappointed investors who had hoped for a resolution.
Adding to the negative sentiment, U.S. Trade Representative Jamieson Greer stated in an interview that semiconductors were not a primary focus during the talks between President Trump and Chinese leader Xi Jinping, dashing hopes for a near-term catalyst for the sector.
Monolithic Power Systems is up 56.7% since the beginning of the year, but at $1,467 per share, it is still trading 11.7% below its 52-week high of $1,661 from May 2026. Investors who bought $1,000 worth of Monolithic Power Systems’s shares 5 years ago would now be looking at an investment worth $4,742.
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