(Bloomberg) -- A gauge of global chip stocks and AI bellwether Nvidia Corp. have fallen together into a technical correction, showing moderation in the global equity market’s most conspicuous driver over the past year and a half.

The Philadelphia Semiconductor Index and Nvidia dropped more than 3% each Wednesday, pushing them down more than 10% from record high levels reached in March. 

In addition to concerns of the rallies becoming overheated, the sector has been hit by concerns over pushed back Federal Reserve interest rate cuts and China’s weak economy.

Dutch chipmaking equipment firm ASML Holding NV led Wednesday’s decline in the so-called SOX gauge after it posted disappointing orders for the latest quarter. Top customers are holding off as they work through stockpiles, though China’s buying of less-sophisticated machines has held up amid US restrictions on its access to high-tech equipment.

Taiwan Semiconductor Manufacturing Co. may help boost sentiment after it reported its first profit increase in a year on Thursday, helped by strong AI demand. The primary outsourced maker of chips for Nvidia as well as Apple Inc. reported a 9% increase in net income to NT$225.5 billion ($7 billion) for the first three months of the year, beating the consensus estimate.

Read More: TSMC Posts First Profit Growth in a Year After Global AI Boom

TSMC’s results were “not too bad,” said Amir Anvarzadeh, a Singapore-based strategist at Asymmetric Advisors. Still, the company’s China business is “most likely to fall to close to zero, given the domestic fab capacity the Chinese are building,” Anvarzadeh said. Foundries with no business in the most cutting-edge chips may be hurt by higher power costs, he added.

TSMC’s American depositary receipts are down 6.8% from their March all-time high. The biggest drags on the SOX in its drop into correction have been Advanced Micro Devices Inc. and Intel Corp., which are down more than 20% each since the gauge’s March 7 peak.

--With assistance from Charlotte Yang and Youkyung Lee.

(Updates with details of TSMC’s earnings report and new Asymmetric comment)

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