Shares of US semiconductor companies are entering a high-risk zone. My data analysis points to a worrying correlation: the SOX index has been moving in sync with silver mining stocks for almost a year, leading them by about four months. Given that silver mining stocks have already peaked and reversed downward earlier this year, the semiconductor sector could face a similar collapse.
Both asset groups have shown parabolic growth, fueled by hype in commodity markets. However, if the historical link holds, we are in for several tough months for the tech sector. The most vulnerable segment appears to be memory manufacturers—the most "commodity-like" part of the industry, which is the first to react to changes in demand.
Why are semiconductors under threat?
The fundamental problem lies in excessive dependence on capital expenditures by hyperscalers—the largest data center operators. Meta Platforms' (recognized as an extremist organization and banned in Russia) recent announcement about plans to sell excess computing capacity to third-party clients is a clear signal. This means the company overestimated its own needs for AI infrastructure and will likely reduce chip purchases.
The market is entering a phase of "reality check on demand." Investors are beginning to question whether the massive investments in AI capacity are justified. If the cooling continues, the correction in semiconductors could be deep and prolonged.
What does this mean for cryptocurrencies?
The connection is direct. Over the past year, capital has actively flowed from cryptocurrencies into AI-related stocks, putting pressure on bitcoin during the unprofitable first half of the year. If the bet on AI begins to cool, some of this capital could theoretically return to risk assets, including cryptocurrencies.
However, there is also a reverse scenario. A broad correction in the tech sector could drag bitcoin down with it, as it has recently been moving in close correlation with the stock market. Thus, the dynamics of semiconductors become a critical indicator for crypto investors.
My professional opinion: The "silver collapse" scenario for semiconductors is not just speculation but a real risk based on recurring market patterns. Crypto investors should closely monitor the SOX index. If the correction in chips turns out to be local, it could act as a catalyst for liquidity to return to bitcoin. If the decline is broad—prepare for temporary pressure on the entire risk asset market.