After investors brushed off worries about demand following price hikes for Apple (AAPL) products, the firm is reportedly securing chip development with Broadcom (AVGO).
Apple will spend over $30 billion in a multi-year contract with Broadcom. It will get radio-frequency chips produced by Broadcom in the U.S. Broadcom will invest $1.5 billion in its Fort Collins, Colorado factory. This will result in the production of over 15 billion chips.
In the chip sector, memory supplier SK Hynix is set to list its ADRs, or American depository receipts, on the U.S. exchange. This will raise $28 billion. Demand exceeds supply, setting up for a post-listing price spike for its stock. Pricing of the ADR is today, while trading on the Nasdaq starts on July 10.
Ahead of the strong demand, Micron Technology (MU) closed down by 17.8% in the last week. Still, its uptrend is intact. However, Intel (INTC) closed at around $110.24, a level not seen since last month. Arm Holdings (ARM), Marvell Technology (MRVL), and Qualcomm (QCOM) all trade well off their 52-week highs.
Heavy daily trading of SK Hynix might dilute demand for those chip companies. But in the medium term, their performance will depend on AI hyperscalers continuing to spend heavily on equipment.
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