As Biden signs CHIPS Act into law, Micron leads sector lower after issuing weak forecast
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President Biden signed the CHIPS Act into law on Tuesday, calling it a "once-in-a-generation" piece of legislation to provide a stronger and more secure economy. However, the semiconductor industry moved noticeably lower as Micron Technology (NASDAQ:MU) issued a warning that its fourth-quarter would be weaker-than-expected, citing macroeconomic factors and supply chain constraints. 
Micron (MU) shares fell more than 5% after the company said its fourth-quarter revenue would be at or below the low-end of its previous guidance of $6.8B to $7.6B that the company gave on June 30.
In addition, Micron (MU) said its bit shipments during the first-quarter would decline sequentially and there would be "significant" sequential declines in revenues and margins. Micron (MU) also added that it would be free cash flow negative in the first-quarter.
Micron (MU) also added that its total capital expenditures in 2023 would be down significantly when compared to 2022.
Following Micron's (MU) warning, several other chip companies traded lower on Tuesday, including Nvidia (NASDAQ:NVDA), which issued its own dire forecast on Monday.
Nvidia (NVDA) fell nearly 4%, while competitors Advanced Micro Devices (NASDAQ:AMD) and Marvell Technology (MRVL) lost 4% and 7%, respectively.
Intel (NASDAQ:INTC), which is seen as the biggest beneficiary of the CHIPS Act according to Bank of America, declined more than 2% near mid-day.
Other semiconductor companies also lost ground, including Texas Instruments (TXN), Analog Devices (ADI), Qualcomm (QCOM), Broadcom (AVGO), ON Semiconductor (ON) and Microchip (MCHP).
Semiconductor equipment makers fell sharply, with Applied Materials (AMAT), KLA Corp. (KLAC) and Lam Research (LRCX) all declining more than 7%.
Separately on Tuesday, Micron Technology (MU) said it would invest $40B through the end of the decade in the U.S. to build leading-edge memory manufacturing in multiple phases.