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Global semiconductor stocks plummeted ASML, NVIDIA and TSMC Stock prices fell on reports of tougher U.S. export controls and rising geopolitical tensions triggered by comments by former U.S. President Donald Trump.
ASML’s Dutch-listed shares fell 6.5% in morning trading, Tokyo Electron Japanese stocks closed down about 7.5%.
This movement Bloomberg On Wednesday, it was reported that the Biden administration is considering a broad crackdown on companies that export critical semiconductor manufacturing equipment to China.
Washington’s Foreign Direct Products Regulations (FDPR) allow the US to impose restrictions on foreign products even if they contain only traces of US technology, which can affect non-US companies.
CNBC has reached out to the State Department, the Bureau of Industry and Security and the Office of the U.S. Trade Representative for comment on the report.
ASML’s shares fell despite the company reporting second-quarter profits that beat market expectations. But 49% of its sales in the period came from China, highlighting how much risk the company is exposed to if regulations are tightened. ASML makes the machines needed to make the world’s most advanced chips.
Former President Trump’s comments further increased negative sentiment toward semiconductor stocks.
In an interview, President Trump said Taiwan should pay for its defense. Bloomberg Businessweek The announcement was made on Tuesday. The former president also claimed Taiwan accounts for “about 100 percent” of the U.S. semiconductor business.
President Joe Biden and Chinese President Xi Jinping are due to meet on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco in November.
Saul Loeb | AFP | Getty Images
The comments raise doubts about the US’s resolve to defend Taiwan if it comes under attack from China, which considers the island part of its territory, under a new Trump presidency.
TSMC’s Taiwan-listed shares closed down 2.4% on Wednesday.
Geopolitical tensions also weighed on U.S. semiconductor stocks. VanEck Semiconductor ETF It was down about 2.7% in premarket trading, while Nvidia was down about 3% before the market opened. arm and Applied Materials In U.S. premarket trading, the stock was one of the laggards among other U.S.-listed stocks.