VanEck Semiconductor ETF Retreats From Record as Micron Rout and Bubble Fears Trigger Two-Day Slide

The VanEck Semiconductor UCITS ETF fell over 4% from its all-time high as a Micron-led selloff, profit-taking, and a bearish Bank of America report on AI spending rattled the sector.

The VanEck Semiconductor UCITS ETF has erased more than 4% of its value in a two-day selloff that began immediately after it struck an all-time high of €111.18 on June 30. By Thursday’s close, the fund had fallen to €101.78, shedding 2.13% in that single session alone, as a perfect storm of profit-taking, a Micron-led rout, and a bearish Bank of America study on AI spending converged to rattle the sector.

Micron Technology was the epicentre of the storm. On July 1, the memory-chip maker — whose high-performance memory powers Nvidia’s GPU systems and sits at the heart of the AI infrastructure boom — collapsed by more than 10%. The stock had built up a staggering 260% gain since the start of the year, making the pullback a sharp reversal for one of the market’s strongest performers. The iShares Semiconductor ETF shed 4.7% on the same day, and Sandisk also saw double-digit losses. The selling pressure continued into Thursday, dragging the VanEck fund further from its record.

Adding to the unease, a Bank of America report released around the same time flagged the entire semiconductor market as overextended, warning that the scale of capital spending on AI infrastructure may no longer be sustainable. Prominent investor Michael Burry echoed that caution, criticising the multibillion-dollar factory investments planned by Samsung and SK Hynix. Burry argued that such aggressive capacity expansion risks flooding the market with supply once the current cycle cools. The warnings hit the ETF’s largest holdings hard on Wednesday: Intel slumped 7%, Taiwan Semiconductor fell 6%, and AMD dropped 5%.

The fund’s concentrated portfolio amplifies every tremor. Nvidia alone accounts for nearly 18% of assets, and together with Taiwan Semiconductor, Broadcom, Intel, AMD and Micron, the top six positions represent 55% of the fund. That concentration means a single stock’s plunge — such as Micron’s — registers immediately in the ETF’s price. Meanwhile, cost pressures are building across the supply chain. Infineon and Texas Instruments both raised prices on power-management components at the start of July, citing higher energy and freight costs. The hikes underscore pricing power but also squeeze margins for downstream chip buyers.

Despite the pullback, the longer-term picture remains remarkably strong. After Thursday’s close, the ETF still shows a year-to-date gain of 85.19%, down from 89% before the latest leg of selling, and a 12-month return of 152.84%. The 50-day moving average of €93.14 and the 200-day average of €65.29 both sit well below the current price, confirming that the broader uptrend is intact. Analyst Andreas Steno Larsen pointed to robust South Korean export data as evidence that the fundamental demand story is still solid.

Even so, the volatility that has come to define the sector is on full display. The annualised 30-day volatility of 59.16% highlights how jittery the market has become. The Relative Strength Index stands at 51.9 — neutral, after having been overbought earlier in the rally. The current retreat echoes a similar pattern from June, when a cautious revenue forecast from Broadcom triggered a selloff that wiped $1.3 trillion from the global chip sector in a single day, sending the Nasdaq down 4% and the Philadelphia Semiconductor Index down more than 6%. Markets recovered quickly then, and history could repeat, but with jobs data due in a shortened trading week around the US holiday, the direction of Federal Reserve policy will also shape where semiconductors go next.