Semiconductor Manufacturing Companies Stocks Fall

Uploaded on 2024-07-19 in NEWS-Cybersecurity News, FREE TO VIEW, BUSINESS-Production-Manufacturing

Semiconductor and related technology shares have been hit hard by former US president Trump’s calls for the key production hub, Taiwan, to pay the United States for its defence has hastened investor activity in selling off chip stocks.

This fall came alongside reports that the US government might be set to increase restrictions on exports of semi-conductor equipment to China.

After a period riding high on investor enthusiasm for AI which promoted chipmaker Nvidia to the most valuable corporation on the US stock market, Wall Street's semi-conductor index lost more than $500 billion in value recently in its worst session since 2020 following these comments by Donald Trump.

The latest worries for chip investors come after Washington adopted a more protective stance for the US semiconductor manufacturing industry, which it views as strategically important for competing against China. The United States has told allies it is considering using the most severe trade sanctions available if companies continue giving China access to advanced semiconductor technology.

Technology stocks around the world have also dropped because of concerns about the global computer chip industry.

In the US, the tech-heavy Nasdaq index closed 2.7% recently, while chip stocks have also tumbled in Europe and Asia. In Asia, chip making giant TSMC lost 2.4% recently, while semi-conductor equipment maker Tokyo Electron was also down by about 9%. That came after Nvidia closed 6.6% lower in New York recently, while AMD lost over 10%.

In Europe, shares in the Dutch firm ASML, which makes chip making machines, fell by almost 11%. The falls came after the US government is preparing to impose tighter restrictions on semi-conductor making equipment to China if firms like ASML and Tokyo Electron continue to give the country access to their advanced chip technology.

The Biden administration has previously taken steps to restrict China's access to advanced chip technology. In October, it restricted exports to China of advanced semi-conductors used in Artificial Intelligence (AI) technology.

The remarks on Taiwan by Mr Trump also hinted at possible disruption of global chip supplies and Taiwan produces most of the world's advanced chips.

Image: Igor Omilaev

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