U.S. chipmakers shares fall amid geopolitical tensions, export restrictions considerations
Date
7/18/2024 5:07:25 AM
(MENAFN) On Wednesday, shares of U.S. chipmakers experienced significant declines, plummeting more than 4 percent, driven by geopolitical uncertainties and concerns over potential export restrictions. Republican presidential candidate Donald Trump's lukewarm comments on defending Taiwan and reports suggesting tougher U.S. export controls on advanced Semiconductor technology to China were pivotal factors impacting market sentiment.
According to a news agency, the United States has signaled its intention to tighten trade restrictions if companies continue to provide Beijing with access to advanced semiconductor technology. This development particularly affected shares of ASML, a Dutch chipmaker listed in the U.S., which saw a sharp 9 percent decline despite surpassing second-quarter earnings expectations. Shares of Nvidia, a prominent player in the industry, fell approximately 4 percent, while its competitor AMD experienced a decline of 6.3 percent. Other major chipmakers such as Qualcomm, Micron Technology, Broadcom, and Arm Holdings also saw substantial drops of over 5 percent each.
In contrast, Intel emerged as an outlier with a 5 percent increase in its stock price, attributed to analysts' positive assessments of the company's initiatives to establish manufacturing facilities within the United States. The Biden administration has been actively imposing restrictions aimed at limiting China's access to advanced chip technology, including broad measures implemented in October targeting exports of artificial intelligence processors from companies like Nvidia.
Former U.S. President Donald Trump's remarks further exacerbated market concerns, suggesting that Taiwan should compensate the United States for its defense efforts, as he perceived Washington gains little from its defense commitments. This statement contributed to a notable 6 percent decline in shares of Taiwan Semiconductor Manufacturing Co., which is listed in the U.S. These developments underscore the heightened sensitivity of the semiconductor industry to geopolitical dynamics and regulatory changes, influencing investor sentiment and market volatility.
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