During the summer, chip stocks were hit by concerns about memory pricing and then later, DRAM pricing.
"I think they're signaling something that's broader and indicative of, I think risks that could exist as we go through the fourth quarter and right into the first quarter," said B. Riley FBR analyst Craig Ellis. "This supply chain is in the process of responding to concerns about what happens if trade frictions between the U.S. and China broaden, and there's a reflexive reaction to reduce orders into that, and inventories."
Ellis said he expects to hear more comments like those made by Texas Instruments, as more companies report. Texas Instrument's message reverberated the most through the broader market, feeding fears that slowing Chinese growth and trade wars will bite into earnings growth in the fourth quarter and next year.
"I think they've played into investor's worse fears," said Lori Calvasina, chief U.S. equity strategist at RBC. "I think the tone around demand has been poor for some of them. I think investors are very skittish. I think most companies have come out and said the underlying economic backdrop and demand is fine, but there have been a number of examples that have spooked investors, and semis are on that short list."
The hit on AMD also was a kick to a stock that has outperformed.
"Semis have been weak and AMD and NVIDIA were two stocks that had been holding up pretty well. They're the last two to go," said Paul Hickey, co-founder of Bespoke. "The whole semi weakness is pretty well documented at this point. Some of the pressure is being relieved on the sector, but it's not necessarily going to bounce back from here. It would be good to see that sector show stabilization."