Chip Stock Rout Worsens With Qualcomm's Latest Blast of Bad News

(Bloomberg) -- Semiconductor stocks fell to a fresh low, putting the sector on track for its worst monthly decline in more than a decade, after Qualcomm Inc. lost a U.S. antitrust ruling and the Trump administration was said to be considering adding more Chinese companies to a blacklist.

The Philadelphia semiconductor index sank as much as 2.3%, extending its decline in May to 14%. Most of the damage Wednesday was attributable to Qualcomm, which dropped 11% after a U.S. district judge sided with the Federal Trade Commission in a case accusing the company of anti-competitive practices. Huawei Technologies Co. supplier Qorvo Inc. and analog chipmaker ON Semiconductor Corp. each fell more than 2%.

Semiconductor stocks, which peaked at a record high less than a month ago, have been among the hardest hit by the flare-up in the U.S.-China trade war and President Donald Trump’s move to block Huawei’s access to American-made components. Wednesday’s report that the administration may expand the blacklist threatens to inflame the dispute and choke off more sales in the world’s biggest market for chips.

Ambarella Inc., a maker of video compression and image-processing chips, dropped 14% Wednesday on concern that one of its biggest suppliers, Hangzhou Hikvision Digital Technology Co., could be subject to the ban. Apple Inc., which relies on Chinese labor for the production of most of its devices, is down 9% in May amid rising concern about potential retaliation from China.

To contact the reporter on this story: Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Richard Richtmyer

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