U.S. President Joe Biden and Chinese President Xi Jinping are expected to meet on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco in November.
Saul Loeb | AFP | Getty Images
Global chip inventories plummet ASML, Nvidia and British Semiconductor Exports fell amid reports of tightening U.S. export restrictions and comments by former U.S. President Donald Trump that heightened geopolitical tensions.
ASML’s Dutch-listed shares fell 6.5% in early trade, while Tokyo Electronics Japanese stocks closed down nearly 7.5%.
after the action occurs Bloomberg Reports on Wednesday said the Biden administration is considering a broad crackdown on companies exporting critical chipmaking equipment to China.
Washington’s Foreign Direct Products Rule (FDPR) allows the United States to impose controls on foreign-made products even if they use a minimal amount of U.S. technology. This could impact non-U.S. companies.
CNBC has reached out to the U.S. State Department, Bureau of Industry and Security, and Office of the U.S. Trade Representative for comment on the report.
ASML’s shares fell despite reporting second-quarter profit that beat market expectations. However, 49% of the company’s sales during the period occurred in China, underscoring how much risk the company faces if restrictions are tighter. ASML makes the machines needed to make the world’s most advanced wafers.
Former President Trump’s comments further added to negative sentiment on semiconductor stocks.
Trump said in an interview that Taiwan should pay U.S. defense costs Bloomberg Businessweek Published Tuesday. The former president also claimed that Taiwan accounts for “approximately 100%” of the U.S. semiconductor business.
The comments raised doubts about the United States’ commitment to defending Taiwan under Trump’s presidency and in the event of an attack by China.
TSMC’s Taiwan-listed shares closed down 2.4% on Wednesday.
Geopolitical tensions also weighed on U.S. chip stocks. VanEck Semiconductor ETF In pre-market trading, Nvidia shares fell about 2.7%, while Nvidia fell about 3% before the opening. arm and Applied Materials Is one of the other U.S.-listed laggards in U.S. pre-IPO transactions
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