Global technology stocks saw significant declines amid concerns over the semiconductor industry following reports of potential US export restrictions on semiconductor equipment to China and comments from former US President Donald Trump regarding Taiwan’s defense spending.
On Wednesday, the tech-heavy Nasdaq index in the US closed 2.7% lower, mirroring similar declines in chip stocks across Europe and Asia. In Asia, Taiwan Semiconductor Manufacturing Company (TSMC) fell 2.4%, while Tokyo Electron, a major semiconductor equipment maker, saw an 8.8% decline. In New York, Nvidia dropped 6.6% and AMD plunged more than 10%. Meanwhile, in Europe, ASML, a leading manufacturer of chip-making machines, saw its shares tumble nearly 11%.
Analysts and market observers weighed in on the potential implications of heightened export restrictions. Bob O’Donnell, chief analyst at TECHnalysis Research, remarked, “Regardless of the election outcome, it seems likely the US will tighten restrictions. How far they will go remains uncertain.”
The declines followed reports suggesting that the US government could impose stricter controls on semiconductor equipment exports to China, particularly affecting companies like ASML and Tokyo Electron. The US Commerce Department, ASML, and Tokyo Electron declined to comment on the matter.
The Biden administration has previously taken steps to limit China’s access to advanced semiconductor technology, including restrictions on exports used in artificial intelligence applications last October. Mr. Trump’s comments on Taiwan further fueled concerns over potential disruptions to global chip supplies, given Taiwan’s status as a major producer of advanced chips.
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