The US move comes after Bloomberg reported on Wednesday that the Biden administration is considering restricting companies from exporting critical chipmaking equipment to China.
Wong Yu Liang | Moment | Getty Images
Chip stocks in Asia fell sharply on Thursday following a tech sell-off on Wall Street amid reports the United States may be considering tightening export restrictions.
Coupon of Taiwan Semiconductor Manufacturing Company — the world’s largest chip supplier — fell as much as 4.3% in Asian trading, before narrowing losses. The company reported on Thursday Q2 revenue and earnings expectations went better than expected.
TSMC’s suppliers are also affected, with Japanese machinery companies Tokyo Electronics down nearly 9% while Screen holding down more than 8%.
Other chip-related stocks like lithography materials suppliers Tokyo Ohka Kogyo and industrial water company Organ also decreased by 4.53% and 3.13% respectively.
ONE Bloomberg A report on Wednesday said the Biden administration may be considering restricting companies from exporting critical chipmaking equipment to China, further ratcheting up tensions between the two superpowers.
“Chip companies are the market’s favorite companies. There’s digitalization in almost everything we touch. Any kind of tariffs and trade restrictions will impact these chip companies. We’re seeing that globally,” said Ayako Yoshioka, senior portfolio manager at Wealth Enhancement Group.
South Korean chip stocks were not spared either. Samsung Electronics down nearly 2%, while SK Hynix down nearly 5% and SK Square down nearly 10%.
But Yoshioka said buying opportunities remain for long-term investors.
“The market moves quite a bit just based on sentiment and headlines, especially in the short term. In the long term, you really have to focus on the promise of [artificial intelligence] and what it can actually do for a lot of businesses and consumers,” she told CNBC.Asian Street Signs“
“Policy hurdles could certainly be a catalyst for a negative reversal in the market, earnings could also be another catalyst because of high expectations heading into earnings season… That could potentially create some negative pressure on some stocks in the short term,” Yoshioka explained.
The Foreign Direct Product Rule, or FDPR, allows the United States to regulate foreign-made products even if they use very little American technology, which can be a hindrance to non-U.S. companies.
The spillover effect on Asian tech stocks comes after a big decline on Wall Street from ASML And Nvidiasaw losses of 12% and 7% respectively.
ASML Groupmaker of the world’s most advanced chipmaking machines closed 12% lower, despite reporting better-than-expected results. Q2 earnings.
Arm, AMD Processor, Marvelous, Qualcomm And Broadcom ended the trading day down more than 7%.
US Republican presidential candidate Donald Trump said Bloomberg Businessweek That Wednesday Taiwan should pay the United States for defenseHe also blamed Taiwan for taking “about 100%” of the US chip business.
— CNBC’s Arjun Kharpal contributed to this report.
