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Semiconductors were in investors’ line of fire on Thursday, with the sector poised for its worst day in nearly five months and the sell-off dragging the broader technology sector lower.
The S&P semiconductor and semiconductor equipment index fell 2.8 per cent — leaving it on track for its biggest one-day decline since June 9. The decline weighed on the wider technology sector, with the Nasdaq Composite down 0.8 per cent for the day.
Advanced Micro Devices led the decline among chipmakers, falling 5 per cent to $11.15. The slide came after Intel confirmed late on Wednesday that it had poached Raja Koduri, head of AMD’s fast growing graphic chips unit Radeon Technologies — to head up its newly formed core and visual computing group. Interestingly, Mr Koduri’s jump also comes after Intel recently teamed up with AMD to build chips in a move that was perceived as taking on rival Nvidia.
Mr Koduri announced his departure from AMD on Tuesday, raising questions about the growth prospects at Radeon and sparking chatter that the move could boost Intel’s competitiveness in the graphic chips business at the expense of Nvidia and AMD.
However, Hans Mosesmann, an analyst at Rosenblatt Securities disagrees. He notes that while Mr Koduri is a “rock star” in the world of graphics processing chips and his departure from AMD is a “strategic loss” for the company, it may not provide enough of a boost for Intel, which is in its”third or fourth serious effort in graphics”.
“The Intel move in our view is a no-win situation for him as it is way too late in the game for him to change things and innovate,” said Mr Mosesmann.
Still that did not prevent shares in semiconductors from lurching lower. Nvidia, which is slated to report results after the…