Key Highlights

● FormFactor fell Friday as the semiconductor selloff stretched into another session.

● No company-specific news was cited; the stock moved with the sector.

● Reports counted an eighth straight decline for chip stocks; 57 of 60 basket names fell.

● Lam Research and Texas Instruments report Oct 21; Western Digital reports Oct 22.

Testing names slip

FormFactor (NASDAQ:FORM), which makes probe cards and other systems used to test semiconductors while they are still on the wafer, fell on Friday. Market commentary said the stock moved with the sector and cited no company-specific news.

FormFactor was grouped with Vishay Intertechnology (NYSE:VSH), Teradyne (NASDAQ:TER), Penguin Solutions (NASDAQ:PENG) and Applied Materials (NASDAQ:AMAT) in a roundup of chip stocks trading lower. Teradyne, a larger maker of semiconductor test equipment and the closest comparison to FormFactor in the group, slipped, while Penguin Solutions fell to $58.49 and Vishay slipped, per market data.

Market commentary tied the weakness in the sector to rising borrowing costs and remarks from Federal Reserve Chair Kevin Warsh that put price stability first. Speaking at an IMF gathering in Bangkok, Warsh declined to preview the October rate decision. "I don't prejudge meetings," he said.

A long losing streak for chips

The semiconductor sector extended a run of losses. The PHLX Semiconductor Index fell to 11,137.29, with all 30 members lower. Market reports counted an eighth straight decline for chip stocks. Sources differed on the streak's significance: one report described a setup for a ninth straight loss, the first since 2006, while another called it the longest losing streak since 2008.

The selling hit companies of all sizes. Advanced Micro Devices (NASDAQ:AMD) sank, Intel (NASDAQ:INTC) tumbled and Micron Technology (NASDAQ:MU) slid, with memory stocks also facing worries about Chinese competitor CXMT. KLA (NASDAQ:KLAC), a major maker of inspection and process-control equipment, fell, as did Broadcom (NASDAQ:AVGO). In a 60-stock semiconductor basket, 57 were falling.

The broader theme, according to market commentary, was a shift in investor focus from what artificial intelligence can do to how it will be financed. Reports indicated that more than $1 trillion was erased from semiconductor and AI-related stocks over the week.

Indexes retreat

The Russell 2000 fell 45.90 points to about 2,721, according to market data, after opening higher; another report put the close at 2,719.57. The index lost about 85.6 points over the week.

The Nasdaq Composite dropped 572.99 points to 26,140.03, its worst week since June, while the S&P 500 lost 84.62 points to 7,659.44 and the Dow Jones Industrial Average slipped 175.28 points to 52,002.41. Energy was the strongest sector and technology the weakest. The Cboe Volatility Index rose 3.53 points to 19.99. Taiwan Semiconductor Manufacturing (NYSE:TSM)'s third-quarter revenue of $46.72 billion topped guidance, and it kept its 2026 capital spending plan at $60 billion to $64 billion, per market reports.

FormFactor Customers Await Lam Research Results

The Fed's next decision is on Oct 28, with the personal consumption expenditures price index and the first estimate of third-quarter GDP due Oct 29. Futures still price roughly one quarter-point hike by December, while Bank of America continues to expect a move in October, keeping borrowing costs in focus for capital-intensive chip companies.

Next week's chip earnings will set the tone for test-equipment suppliers. Lam Research (NASDAQ:LRCX) and Texas Instruments (NASDAQ:TXN) report after the close on Wednesday, Oct 21, and Western Digital (NASDAQ:WDC) reports on Thursday, Oct 22. Intel follows on Oct 29. Commentary on wafer-fab equipment spending and advanced packaging could matter for FormFactor's customers.