Asia chipmaker shares slide after US curbs on China
Major Asian companies that make computer chips have seen their stock prices drop after the US said it would take tough new steps to stop selling technology to China.
The US said it will stop American companies from selling certain chips to Chinese companies that are used in supercomputers and artificial intelligence.
The rules, which were announced on Friday, also affect sales from companies outside the US that use American equipment.
As the world economy slows down, tech companies are also seeing less demand.
On Tuesday, shares of TSMC, a chipmaker in Taiwan, fell more than 8%, Tokyo Electron fell 5.5%, and Samsung Electronics in South Korea fell 1.4%.
The drops happened after stock markets in Taiwan, Japan, and South Korea opened again on Tuesday after being closed on Monday for holidays.
In another part of Asia, SMIC stock fell by 4% in Hong Kong. SMIC is the biggest chipmaker in China.
The US tightens restrictions on chip sales to China
The US doesn’t let tech companies build factories in China.
Under the rules, US companies that want to sell Chinese chipmakers equipment that can make more advanced chips must apply for a license.
The rules, according to Washington, were made to stop China from making military and technological advances.
Some of the measures go into effect right away. This is one of the biggest changes in US policy toward selling technology to China in decades.
Monday, shares of chipmakers Intel, Nvidia, Qualcomm, and Advanced Micro Devices fell, causing the technology-heavy Nasdaq index to close at its lowest level since July 2020.
In the past few weeks, a drop in demand for electronics like computers and smartphones has also hurt technology stocks around the world.
Friday, the South Korean tech giant Samsung said that its profits would drop by 32%.
The biggest maker of smartphones in the world said its profits from making microprocessors were hurt because the prices of memory chips fell around the world because less people were buying consumer electronics.
Sonal Varma and Si Ying Toh, who work for Nomura Research, said, “The chip downturn suggests that exports will fall even more in the future.”
“So far, export growth has already turned negative in India in September, but there is more and more evidence that export growth will turn negative in more Asian economies in Q4,” they said in a note on Tuesday.
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