Chip manufacturers' stocks faced significant drops on Friday after news surfaced regarding potential new US limitations on access to the Chinese semiconductor market.
Market Impact
Major companies like Taiwan Semiconductor Manufacturing Co. (TSMC) saw a 2.5% decline in their US-listed shares. The Philadelphia Semiconductor Index also dropped by 2%, while Applied Materials fell 4%, and ASML Holding NV took a 1.9% hit.
US Government Explanations
Jeffrey Kessler, the Commerce Department’s undersecretary for industry and security, warned TSMC, Samsung Electronics, and SK Hynix that their current waivers might be rescinded. He stated that this could disrupt key parts of the global chip supply chain. In response, the Commerce Department attempted to calm the situation by stating that companies would not be shut out of China.
Future Plans of Companies
Industry executives are contemplating the need to apply for special licenses to keep their Chinese factories operational. Some are already looking for suppliers from Japan and Europe to find equipment not affected by US restrictions. However, the situation remains unstable as the waiver removal has not yet been confirmed.
The unfolding events surrounding potential restrictions on access to China could impact the pace of recovery in the global semiconductor industry and complicate trade negotiations between the US, South Korea, and Taiwan.
