Wall Street’s semiconductor index saw a loss exceeding $500 billion in stock market value on Wednesday, marking its worst session since 2020. This downturn followed reports that the United States was considering stricter restrictions on exports of advanced semiconductor technology to China.
Remarks from former President Donald Trump suggesting that Taiwan should contribute financially to U.S. defense efforts further fueled selling pressure in chip stocks. These concerns add to a trend where Washington has increasingly taken protective measures to safeguard the U.S. semiconductor manufacturing industry, seen as crucial in competing with China.
According to Bloomberg News, the United States has informed allies of potential severe trade restrictions if companies continue providing China access to advanced semiconductor technology. Following these developments:
- U.S.-listed shares of Dutch chipmaking equipment provider ASML Holding (ASML.AS) plummeted 13%, despite beating second-quarter profit expectations.
- Nvidia (NVDA.O), a major player in AI, dropped nearly 7%, resulting in a market capitalization loss exceeding $200 billion.
- Smaller competitors like AMD (AMD.O) and Arm fell approximately 10%, while Micron (MU.O) and Broadcom (AVGO.O) declined by 6% and 8%, respectively.
On the other hand, companies with U.S. chip manufacturing operations saw gains. GlobalFoundries (GFS.O) surged almost 7%, and Intel (INTC.O) edged up by 0.35%. Analysts speculate that Intel could benefit from geopolitical tensions due to its ongoing investments in several manufacturing plants within the United States.
