Chip stocks plunge on expectations that the US will toughen China’s laws
Worldwide technology equities have fallen due to worldwide computer chip business concerns. The sell-off followed reports that the Biden administration planned to tighten restrictions on semiconductor equipment shipments to China. Former US President Donald Trump’s comments that Taiwan, the world’s largest chip maker, should pay for its security heightened fears.
In the United States, the tech-heavy Nasdaq index closed 2.7% lower on Wednesday, while semiconductor stocks fell in Europe and Asia. “Regardless of the outcome of the elections, I believe the US will tighten some of the restrictions,” said Bob O’Donnell, principal analyst at TECHnalysis Research.
“How far they will take it, though, is the big question.” In Asia, chipmaker TSMC fell 2.4% on Thursday, while semiconductor equipment maker Tokyo Electron fell by approximately 8.8%. This happened after Nvidia closed 6.6% lower in New York on Wednesday, while AMD fell more than 10%. In Europe, shares of ASML, which manufactures semiconductor manufacturing machinery, fell by about 11%.
The dips came after Bloomberg News reported on Wednesday that the US government is poised to apply its strictest restrictions on semiconductor manufacturing equipment to China if companies like ASML and Tokyo Electron continue to provide the country with advanced chip technology.
