Chip stocks tumble in Asia amid fears of US export curbs on semiconductor technology – Business Standard

Chip stocks in Asia took a significant hit on Thursday following a sharp decline on Wall Street. This drop was fueled by reports that the United States is considering imposing stricter restrictions on the export of advanced semiconductor technology to China. Among the companies most affected by this news is Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, which has seen a staggering loss of roughly $61.35 billion in market value over the span of just two days.

TSMC, which is set to report its earnings later today, has been hit hard by both the potential US export restrictions and recent remarks made by US Republican presidential nominee Donald Trump regarding Taiwan’s defense. The company’s stock fell more than 3 per cent, mirroring the downturn seen in other major tech giants such as Samsung Electronics, SK Hynix, and Tokyo Electron.

The Global X Asia Semiconductor ETF also dipped by 2.7 per cent, erasing some of its gains for the year. The decline in chip stocks across the region comes in response to a Bloomberg News report that the Biden administration is contemplating a measure known as the foreign direct product rule, which could impact companies like Tokyo Electron and Netherlands’ ASML.

Investors are increasingly concerned about the potential restrictions on these companies, especially given the strategic importance of the semiconductor industry in the ongoing competition with China. The recent market turmoil highlights the broader geopolitical tensions at play, with implications for the overall tech sector.

As the situation continues to unfold, market analysts are closely watching for any further developments that could impact the global semiconductor industry. The fallout from these export restrictions has already had a ripple effect across Asian markets, with major bourses like Tokyo’s Nikkei and Taiwan stocks experiencing significant drops in response to the news.