After US restrictions on China, shares of Asian chipmakers decline

Following the US’s announcement of tough new measures to limit technology sales to China, shares in major Asian computer chipmakers have fallen.

According to the US, American companies will not be allowed to sell certain chips used in supercomputers and artificial intelligence to Chinese companies.

The regulations, which were made public on Friday, also target purchases made by foreign businesses using American-made machinery.

As the world economy weakens, technology companies are also witnessing a decline in demand.

On Tuesday, the stock of Taiwanese chipmaker TSMC fell more than 8%, Tokyo Electron in Japan dropped 5.5%, and Samsung Electronics in South Korea dropped 1.4%.

The declines followed the reopening of the stock markets on Tuesday in Taiwan, Japan, and South Korea following their closure on Monday for public holidays.

In other parts of Asia, shares of SMIC, the largest chipmaker in China, declined by 4% in Hong Kong.

According to the rules, US businesses must apply for a license before supplying Chinese chipmakers with machinery that can produce more sophisticated chips.

According to Washington, the regulations aimed to stop Chinese military and technological advancements.

The measures signal one of the most significant changes in US policy toward technology exports to China in decades, some of which take effect right away.

The Nasdaq index, which is heavily weighted toward technology, fell on Monday in the US, dropping to its lowest level since July 2020 as shares of chipmakers Intel, Nvidia, Qualcomm, and Advanced Micro Devices declined.

Lower demand for electronic products, including computers and smartphones, has recently hurt technology shares around the world.

 

FAQ

• How much TSMC fell on Tuesday?

Ans. 8%

• How much Tokyo Electron in Japan dropped?

Ans. 5.5%

• How much is Samsung Electronics in South Korea?

Ans. 1.4%