Global Technology Stocks Plummet Amid Fears of Chip Industry Restrictions
Technology stocks around the world have taken a hit as fears about the global computer chip industry intensify. The sell-off was triggered by reports suggesting that the Biden administration may tighten restrictions on exports of semiconductor equipment to China.
Former US President Donald Trump’s comments adding to the concerns, stating that Taiwan, the largest producer of chips, should pay for its own defense, further fueled the sell-off.
In the US, the Nasdaq index closed 2.7% lower on Wednesday, with chip stocks also tumbling in Europe and Asia. Chip-making giant TSMC in Asia was trading almost 3% lower on Thursday, while semiconductor equipment maker Tokyo Electron saw a decline of around 9.5%.
Nvidia closed 6.6% lower in New York on Wednesday, while AMD lost more than 10%. In Europe, shares in ASML, a company that makes chip-making machines, tumbled by almost 11%.
The market turmoil followed a report by Bloomberg News that the US government is preparing to impose strict restrictions on semiconductor-making equipment to China if companies like ASML and Tokyo Electron continue to provide the country access to their advanced chip technology.
ASML declined to comment when contacted by the BBC, and Tokyo Electron did not immediately respond to a request for comment. The BBC has reached out to the US Commerce Department for a statement on the matter.
The Biden administration has previously taken steps to limit China’s access to advanced chip technology, including restricting exports of advanced semiconductors used in artificial intelligence (AI) technology.
The remarks made by Mr. Trump regarding Taiwan also hinted at potential disruptions in global chip supplies, as Taiwan is a major producer of advanced chips.
“Regardless of the outcome of the elections… I think we will see the US increase some of the restrictions,” said Bob O’Donnell, chief analyst at TECHnalysis Research. “How far they will take it, though, is the big question.”
Investors and industry experts are closely monitoring the situation as the uncertainty surrounding the global chip industry continues to weigh on technology stocks worldwide.
