Chip Stocks in Asia Tumble on News of Tighter U.S. Curbs on Semiconductor Technology to China: By Youn Ah Moon and Ankur Banerjee

Chip stocks in Asia took a hit on Thursday following reports that the United States was considering tighter curbs on exports of advanced semiconductor technology to China. This news sent shares tumbling, with Taiwan Semiconductor Manufacturing Co (TSMC) losing a significant amount in market value over just two days.

The world’s largest contract chipmaker, TSMC, saw its shares drop 2.4% after U.S. Republican presidential nominee Donald Trump suggested that Taiwan should pay America for its defense. Other technology giants in Asia, such as SK Hynix and Tokyo Electron, also experienced losses.

In Europe, the STOXX 600 index rose slightly, but the technology sub-index fell to a six-week low. The news report from Bloomberg stated that President Joe Biden’s administration was considering a measure that could restrict companies like Tokyo Electron and ASML from selling products made using American technology.

ASML, despite seeing a decline in the previous session, managed to tick up slightly on Thursday after releasing forecast-beating second-quarter earnings. However, concerns over potential U.S. restrictions on semiconductor technology overshadowed this positive news.

The Biden administration’s efforts to limit Chinese access to advanced chip technology have raised worries among investors, leading to a de-risking event in the semiconductor industry. This move comes amidst a global AI boom that has driven a rally in tech stocks, with the Nasdaq up 20% and the S&P 500 up 17% this year.

Overall, the semiconductor industry is facing uncertainty as geopolitical factors play a significant role in the market. The impact of potential restrictions on exports of advanced semiconductor technology to China has cast a shadow over the future of chip stocks in Asia and beyond.