Beaten-Down Chip Equipment Stocks Lead Semiconductor Rebound
(Bloomberg) -- Semiconductor equipment stocks, one of the worst performing technology groups this year, helped lead chip companies higher on Thursday amid a broader market rally.
Applied Materials Inc., MKS Instruments Inc. and Entegris Inc. were among the best performers in the Philadelphia semiconductor index, which rebounded from a 2.7 percent deficit to close with a 0.7 percent gain in the last two hours of trading. Applied Materials Inc., the worst performer in the benchmark in 2018, rose 3 percent, while MKS Instruments and Entegris each added 2.7 percent.
Semiconductor equipment companies slumped in 2018 amid waning demand for chips used in a broad range of devices and a trade war between the U.S. and China. Rising supplies of memory chips also weighed on the industry as chipmakers reduced or delayed factory investments.
Micron Technology Inc., the largest U.S. maker of memory chips, was the biggest gainer in the chip index on Thursday, adding 3.4 percent. The stock has fallen 49 percent from a nearly 18-year high in May. Earlier this month Micron cut its capital spending budget for fiscal 2019 to $9 billion to $9.5 billion, a reduction of $1.25 billion at the midpoint.
©2018 Bloomberg L.P.