Shares of United Microelectronics (NYSE:UMC | UMC Price Prediction) are dropping 7% Tuesday afternoon to $18.22, part of a broad foundry selloff tied to renewed fears about AI capital spending. The selling pressure looks like a sector-wide de-rating and risk-off rotation rather than a UMC event.
The context helps here. UMC stock was still up 153% year to date (YTD) heading into today’s session and carries a market cap near $45.68 billion. Its trailing twelve month P/E ratio sits at 17.71x, a modest multiple that stands out against the sharp run.
AI Spending Fears Trigger the Selloff
The Wall Street Journal reported Monday, August 17 that nine top tech companies carry roughly $3 trillion of off-balance-sheet commitments mostly tied to AI, growing faster than the $600 billion of capital expenditures they reported over the past year. That analysis has become the pressure point for reassessing foundry demand, particularly the 2027 and 2028 capacity plans several foundries have telegraphed to the market.
Anthropic told investors its annualized revenue run rate reached $65 billion at the end of July, about a sevenfold increase from a year earlier, per CNBC. OpenAI’s annualized run rate recently reached $40 billion. Reuters reported Anthropic projects roughly $190 billion to $200 billion of 2028 revenue, ambitious figures that also show why any doubt about monetization can rattle the entire semiconductor chain.
Rates matter too. The 30-year Treasury yield topped 5.33% Tuesday, a 19-year high, and was trading near 5.29%. Elevated long-end yields raise the discount rates applied to future cash flows, and that pressures high-multiple growth names, semiconductor foundries very much included.
Peer Foundries Feel the Same Pressure
Taiwan Semiconductor Manufacturing (NYSE:TSM) stock is falling 4% to $412.09, though shares remain up 43% YTD. TSM stock carries a trailing P/E ratio of 32.15x, so any question mark around hyperscaler AI capex hits this stock first given its heavy leverage to 3nm and 2nm ramps.
Meanwhile, GlobalFoundries (NASDAQ:GFS) shares are sinking 7% to $49.78, giving back some recent gains. The company reported Q2 2026 revenue of $1.786 billion with communications infrastructure and data center revenue growing 62% year over year (YoY), so the underlying business isn’t the issue here. The stock is up 53% YTD and now trades as if the AI optics tailwind might slow.
Tower Semiconductor (NASDAQ:TSEM) stock is sliding 10% to $236.1, the largest single-day drop in the group. The company reported Q2 2026 revenue of $460 million on August 4 with a record 30% gross margin, and management guided Q3 revenue to $520 million while raising the 2028 revenue target to $3.6 billion. The company’s shares are still up 125% YTD, which explains why profit-taking hits hardest here.
iShares Semiconductor ETF Feels the Squeeze
The iShares Semiconductor ETF (NASDAQ:SOXX) is dropping 6% to $525.68, showing the pain extends well past the pure-play foundries. The ETF is a broad semiconductor sector fund rather than a foundry-only vehicle, and its 86% YTD gain reflects the entire chain from design and equipment to memory and logic.
Concentration is worth flagging for your risk framework. SOXX clusters exposure in a narrow set of large-cap chip names, so AI capex reassessments move the fund hard in either direction (if the chipmakers wobble, the power, cooling, and networking suppliers behind the buildout become a natural place to look, and we rounded up seven of them in a free report here). Investors watching for foundry-only exposure won’t find it in SOXX, and that is a meaningful distinction on days like this.
For further context, the NASDAQ 100 tracking Invesco QQQ Trust (NASDAQ:QQQ) is falling 1.66% today for broader tech context, meaning semiconductors are underperforming the NASDAQ 100 by a wide margin. The QQQ move suggests the AI infrastructure trade, not the whole tech complex, is under review.
What to Watch
The defensive rotation is telling. Healthcare gained 2% and energy rose 1% at the sector level Tuesday, though the energy bid ties partly to Middle East oil, not pure defense. That mix helps explain why capital left semiconductors so quickly.
Traders may want to keep an eye on whether the foundry group stabilizes into the close or leaks further. If the Wall Street Journal’s off-balance-sheet math keeps circulating, high-multiple foundry names could see continued pressure through the week. Position sizing should reflect that United Microelectronics stock is up 153% YTD and Tower stock is up 125% YTD, and quick reversals in extended names tend to accelerate.
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