Investors worried that higher inflation could lead to expensive borrowing, especially for companies spending heavily on artificial intelligence (AI) infrastructure. The concerns deepened the ongoing sell-off in chip stocks. US chip stocks fell on Thursday as concerns over inflation and rising debt costs increased.
Sandisk shares tumbled 6% on Thursday after falling 5% in the previous session. Sandisk makes flash memory products and has been the S&P 500’s top-performing stock in 2026. Micron shares dropped 4%, while South Korean chipmaker SK Hynix also recorded a decline. However, its shares still fell 4% on Thursday as chip stocks continued to fall.
It reported strong results as demand for AI chips remained high.
The latest fall added to its losses from the previous trading session, according to Yahoo Finance. Both companies faced further pressure following losses in the previous session.Investors were also worried about growing competition from Chinese chipmakers. This added to the fall in memory-chip stocks. Strong earnings and record profits at Taiwan Semiconductor Manufacturing Company (TSMC) failed to lift investor confidence. TSMC is the world’s largest chipmaker that makes chips for other companies. The broader concern for chip companies is whether heavy investment in AI infrastructure can remain financially sustainable if borrowing becomes more expensive.
With inflation rising and bond yields putting pressure on debt-heavy companies, even strong earnings and demand for AI chips were not enough to lift several major semiconductor stocks on Thursday.
