Chip related stocks, including apple inc AAPL-Offerer Taiwan Semiconductor Mfg. Co.Ltd. TSM and samsung electronics co ltd SSNLFtanked on Tuesday morning as traders and investors returning from vacation digested the news biden new government restrictions on China’s access to US semiconductor technology.
Also read: Investing for beginners
Shares of Taiwan Semiconductor fell as much as 7% in morning trade on the island, while shares of Samsung fell nearly 4% in Korea. SK Hynix Inc. HXSCL slipped over 3% in morning trade, while Tokyo Electron Ltd. TOELY Stocks lost over 5%.
That The Philadelphia Stock Exchange Semiconductor Index SOX fell 3.5% on Monday, hitting its lowest level since November 2020, reported Bloomberg.
In addition to restricting US sales of semiconductor technology to China, the new rules also require foreign companies to license American tooling used to manufacture high-end chips sold to China.
Expert Take: Jefferies Financial Group Inc. JEF Analysts wrote in a note that the new rules could increase headwinds for Chinese companies in two areas: restrictions on a broader group of supercomputer chips and restrictions on multinational capital investments in China, the report said.
Continue reading: What new semiconductor restrictions in China mean for US investors
