Asian chip stocks gain as market remains optimistic despite new U.S. export curbs on China.
Asian chip stocks outside China gained on Tuesday, defying a new round of U.S. semiconductor export curbs targeting Beijing's ability to produce high-end chips. Shares of Taiwan Semiconductor Manufacturing Company, the world's largest contract chip supplier, rose 2.4%, signaling market confidence despite rising tensions.
Chip-related stocks in Japan also went up. Tokyo Electron rose by 4.7%, Lasertec rose by 6.7%, Advantest by 3.9%, and Renesas Electronics by 2.2%. Japanese tech conglomerate Softbank, which owns a stake in British chip designer Arm, rose by 3.6%.
The new export restrictions by the U.S. government target high-bandwidth memory chips, which are manufactured by South Korea's two largest memory chip makers, Samsung Electronics and SK Hynix. Despite this, their shares were up 0.9% and 1.8%, respectively, reflecting that market investors are positive about such companies' ability to shift demand to markets such as the U.S. and Europe.
The Biden administration recently added the newest restrictions on 140 more Chinese companies from accessing leading-edge semiconductor technology, which can potentially be used in military advancement. The companies newly added to the export controls list include Naura Technology Group, Piotech, and ACM Research. This meant that shares in Naura Technology and ACM Research fell by 3% and 1%, respectively, and Piotech jumped 1%.
SMIC, the largest chipmaker in China, declined 1.5% in Hong Kong. Secretary of Commerce Gina Raimondo said these new export controls are aimed at preventing China from developing its capabilities in semiconductors that could pose potential national security threats.
The new controls also include restrictions on 24 types of manufacturing equipment and software tools used for chip production that will further strangle global supply chain dynamics.
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