Google's new compression algorithm puts extra pressure on European chipmakers

Shares in European semiconductor companies fall after Google GOOGL.O revealed a new compression algorithm, TurboQuant, that it says helps AI systems use much less memory without hurting performance

"I believe that on top of general market weakness, the Google comments ... (put) some extra pressure on the semi names," Marc Hesselink from ING says

STOXX Europe Technology index .SX8P falls 2.2%, among the worst performers on the wider STOXX 600 .STOXX index, which is down 1%

Hesselink adds it could, however, be positive for the wider market if memory supply-demand is a bit more balanced, given the constrained supply

He doesn't see this impacting long-term memory investment plans

ASML ASML.AS, AT & S ATSV.VI and Aixtron AIXGn.DE fall between 3% and 3.3%, while ams OSRAM AMS.S, Melexis MLXS.BR, Jenoptik JENGn.DE and Mersen CBLP.PA are down between 1.8% and 3%

Siltronic WAFGn.DE ASMI ASMI.AS and Infineon IFXGn.DE are down 1.5%, 2.3% and 2.7%, respectively