The PHLX Semiconductor Sector index plummeted more than 5% on the news, dragging down U.S. peers including Micron. Even Taiwan Semiconductor Manufacturing, which reported a robust 68% jump in June revenue to $13.8 billion, saw its shares slide as markets struggled to distinguish long-term AI winners from potential casualties of the transition. J.D. Joyce of Joyce Wealth Management warned that the intense demand for high-performance chips creates a difficult environment for standard electronics, where rising component costs could eventually be passed to consumers.

Despite the cooling sentiment, infrastructure spending remains aggressive. Meta Platforms expanded its Northeast Louisiana data-center project to 5 gigawatts of capacity, with total costs now exceeding $50 billion. Meanwhile, Intel committed 5 billion euro to expand its manufacturing footprint in Ireland to bolster its high-performance chip output. These moves highlight a widening divide between the massive capital expenditure required to fuel AI and the growing volatility in the public markets.