- Chip stocks drop on fears US to toughen China rules
- The decline followed reports that the Biden administration might tighten restrictions on exporting semiconductor equipment to China
- In the US, the tech-heavy Nasdaq index closed 2.7% lower on Wednesday, while chip stocks have also tumbled in Europe and Asia.
Chip stocks drop on fears US to toughen China rules
Global technology stocks have plunged due to concerns over the computer chip industry. The decline followed reports that the Biden administration might tighten restrictions on exporting semiconductor equipment to China. Additionally, former US President Donald Trump’s comments suggesting Taiwan should pay for its defence heightened these worries. Taiwan is a major chip producer.
In the US, the Nasdaq index fell by 2.7% on Wednesday, with notable drops in chip stocks in Europe and Asia. Companies like Nvidia and AMD saw significant losses, with Nvidia down 6.6% and AMD over 10%. European shares of ASML, a chip-making machine manufacturer, dropped nearly 11%.
Shares in ASML, the biggest supplier of computer chip-making equipment, fell after reports that the US government could implement tighter restrictions on exports to China https://t.co/ULxoxftcQ1 pic.twitter.com/nL4RFgBaQj
— Reuters (@Reuters) July 17, 2024
Bloomberg reported that the US government might impose stricter curbs on semiconductor equipment exports to China if companies like ASML and Tokyo Electron continue supplying advanced technology. Previous measures by the Biden administration already restricted China’s access to advanced AI semiconductors.
“Investors always react to any remarks from the US but despite these comments, the long term business trend for the semiconductor industry is clearly going up,” said Marco Mezger, Executive Vice President of memory chip technology company Neumonda.