Are we heading for a semiconductor stocks crash? It’s increasingly looking that way. After the semiconductor shortages of 2021 and 2022, the pendulum has swung sharply in the other direction.

People have gone back to school, returned to the office, and so on, alleviating the need for so much extra computing technology at home. Meanwhile, it seems semiconductor companies revved up production too much and have excess supply. Now, there is a glut of inventory in various parts of the semiconductor industry. Memory chips, graphics chips, and even analog chips are showing signs of strain.

Throw in global macroeconomic concerns and the overall picture becomes more fraught. Many economists expect a recession to start by early next year, and if it’s a big one, it could be devastating for the already struggling chips industry. All that makes these three semiconductor stocks ones to sell today.

AMD (AMD)

Investors love AMD (NASDAQ:AMD). The firm is led by its charismatic CEO, Lisa Su. There is no denying AMD’s accomplishments in recent years as the firm has roared back from its prior doldrums while stealing market share from key rivals.

However, the momentum has ended. As the glut in the semiconductor industry has piled up, earnings are under pressure.

To that point, AMD just announced a disappointing set of quarterly results. Revenues slipped 9% and gross margin fell by 400 basis points. Despite the drop in revenues, AMD’s costs soared, leading the firm into the red. The firm swung to a loss of $139 million versus a profit of $786 million for the same quarter last year.

AMD has fantastic technology, and it seems set to become a player in the growing AI space as well. But semiconductors are a cyclical industry and AMD has already fallen into unprofitability even before the recession starts. It could be a rough year or two for AMD stock before the current downturn ends.

Micron Technology (MU)

Micron Technology (NASDAQ:MU) is a leader in memory chips. Specifically, it earns the lion’s share of its income from DRAM and NAND flash products.

As technology continues to evolve, we’ve needed far more memory — particularly to power new mobile devices such as smartphones and tablets. Combined with a consolidation in the memory chip industry, investors felt that Micron could overcome its shaky history and become a steady growth story.

Unfortunately, the economic cycle has caused MU stock to sink once again. Micron and other memory chip makers made way too much product last year amid the temporary surge in consumer electronics devices. Now, as its latest quarterly results show, Micron is slashing prices, writing down inventory, and otherwise dealing with the fallout of a sudden downturn in its fortunes.

Rough days are ahead. Analysts are projecting that Micron will lose more than $4 per share in 2023. And with a great recession potentially on the horizon, we could see a steep drop in consumer electronics spending, which could trigger another big leg down in MU stock.

Enphase Energy (ENPH)

Enphase Energy (NASDAQ:ENPH) is a firm that makes semiconductor-based microinverters for the solar photovoltaic industry.

ENPH stock has been incredibly successful in recent years, with shares rising from around $10 to a peak of more than $300 over the past few years. However, it appears that the lights are going out on Enphase; shares are plunging amid a rapidly darkening outlook for the company.

What’s gone wrong? It starts with valuation. The stock hit nearly 100 times earnings at its peak and remains expensive even after its recent decline. Arguably, investors got much too excited about semiconductor technology companies with a green energy angle. Under the Biden Administration, there have been heavy incentives for green power deployments.

But that momentum appears to be running out. The Republican Party retook control of Congress in 2022, placing a substantial obstacle to future solar subsidies. Additionally, some members of Congress are aiming to slash green energy subsidies as part of the current standoff over the debt ceiling.

To sum up, Enphase is an incredibly expensive stock. Its catalyst around subsidies already came and went. And now it faces the prospect of falling spending and a setback in the green energy industry at the same time that the economy is barreling toward a recession.

On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.