Semiconductor sector continues to face pressure! Wall Street tech heavyweight Dan Ives pushes back against the tide: sell-off is a market reaction that is "far overdone," demand gap remains huge.

Title context: Semiconductor sector continues to face pressure! Wall Street tech heavyweight Dan Ives pushes back against the tide: sell-off is a market reaction that is "far overdone," demand gap remains huge. Text: Due to concerns about excessive valuations, rising interest rates, and intensifying competition, the global artificial intelligence (AI) trade is undergoing a stress test, with the semiconductor sector facing particularly strong doubts. However, Wall Street Shenzhen Kaifa Technology analyst Dan Ives believes that this round of selling in semiconductor stocks is "a market reaction that is far overdone." In an interview, Dan Ives said that the overall market is currently "on edge" regarding concerns about the AI construction boom and "some degree of slowdown." He believes that about 5% to 10% of data center projects may ultimately fail to materialize, but he also pointed out that related deals are accelerating, with the demand-to-supply ratio reaching 13:1. In Dan Ives' view, the upcoming earnings season should help ease investors' nervousness. He said: "This will show up in the results, both relative to hyperscalers and relative to chip companies." Dan Ives listed Microsoft Corporation (MSFT.US), NVIDIA Corporation (NVDA..US), Palantir (PLTR.US), and CrowdStrike (CRWD.US) as his most favored AI investment targets. When discussing Meta (META.US), Dan Ives reiterated that the company's AI agent Muse is a "game-changing product." He said Meta will continue to catch up with Anthropic and OpenAI, and this will only further accelerate the "AI arms race." Rising concerns! Semiconductor sector plunges Dragged down by Samsung Electronics falling nearly 7% and SK Hynix dropping more than 10%, South Korea's Kospi index plunged more than 5% on Tuesday; the index has now retreated by one-third from its historical high in June. In U.S. premarket trading on Tuesday, memory chip stocks such as Micron Technology, Inc. (MU.US) and SanDisk (SNDK.US) generally fell; meanwhile, the Philadelphia Semiconductor Index has pulled back more than 7% from its high this month. The "trigger" for the sell-off was news that ChangXin Memory Technologies has made progress in next-generation high-density DRAM architecture, which sparked concerns about intensifying competition. It is reported that ChangXin Memory Technologies is accelerating its next-generation DRAM technology layout and plans to launch DDR5 RDIMM server memory products using a 4F memory cell architecture by the end of this year. For a long time, major global memory manufacturers, including Samsung Electronics, SK Hynix, and Micron Technology, Inc., have been researching next-generation high-density DRAM architectures. However, due to extremely high difficulties in design complexity, manufacturing processes, and yield control, large-scale commercialization has progressed relatively slowly. Reports have pointed out that Samsung Electronics' mass production timetable on a similar technology path is still expected to take several years. If this judgment is accurate, ChangXin Memory Technologies may gain about a two-year advantage in the commercialization of products related to the 4F architecture. If it can manufacture more complex products, this will also give the company a more favorable competitive position in the coming years when the global supply crunch begins to ease. In addition to the news that ChangXin Memory Technologies has made progress in next-generation high-density DRAM architecture, another reason for the sell-off in memory chip stocks was comments made by executives of two major chip giants. Broadcom Inc. (AVGO.US) CEO Hock Tan said on Monday at an event in Singapore that as the entire industry races to build infrastructure to support computing power for increasingly complex AI models, financing may become a bigger obstacle to AI expansion, with an impact that may even exceed shortages of semiconductors, memory chips, or electricity. Intel Corporation (INTC.US) CEO Lip-Bu Tan, who appeared on the same stage, also expressed concern about financing issues. He pointed out that the cost of capital is rising, while the market is also questioning whether companies investing heavily in AI will ultimately be able to obtain sufficient returns. Lip-Bu Tan said: "If there is any challenge right now, it is capital and the cost of funds. On the other hand, in the long run, people want to see return on investment (ROI)." Hock Tan also said that the AI boom has attracted a group of investors whose investment strategies resemble gamblers, and he believes some of them do not understand at all what they are betting on. Hock Tan said: "Many investors have no idea what they are investing in. They set extremely absurd high expectations, and in the end they find themselves almost like they are in a casino." He added that multiple AI companies, including OpenAI, lose billions of dollars each year. Such services require huge investments in high-end chips, data centers, and model research and development, and the industry as a whole has yet to find a sustainable business model. As the U.S. third-quarter earnings season begins, investors are carefully examining whether the billions of dollars invested in chips, data centers, and computing infrastructure can generate sufficient returns to justify the rapid surge in AI trades, especially after some market veterans such as Bridgewater founder Ray Dalio have issued bubble warnings. Companies such as ASML Holding NV ADR and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR will report results this week, which may provide new clues as to whether massive AI investments are paying off.