Shares of Global Semiconductor Equipment Firms Jump as US Considers Sanctions on China’s Chip Industry
Shares of key global semiconductor equipment firms surged on Thursday after a report emerged that the US is considering sanctions on China’s chip industry that stop short of earlier proposals. ASML, a Dutch firm that produces critical machines for manufacturing advanced semiconductors, rose 2.9% in afternoon trade in Europe. Tokyo Electron, a Japanese firm, closed 6.7% higher in Japan where it trades.
According to Bloomberg, the US is considering further measures to restrict sales of semiconductor equipment and AI memory chips to China, but the new rules could stop short of earlier proposals that were seen as stricter. The US Commerce Department’s Bureau of Industry declined to comment on the report.
The US is now considering adding fewer suppliers to Chinese technology giant Huawei to an export blacklist known as the Entity List. One key Chinese firm that won’t be added is ChangXin Memory Technologies, a memory company and potential rival to the likes of SK Hynix and Samsung.
Analysts at Jefferies said ASML had previously guided toward a 30% decline in its revenue from China next year. The exclusion of ChangXin Memory Technologies could mean that ASML’s sales in China “decline by less than expected next year.”
ASML has been caught in the crosshairs of the US and China’s technology battle over semiconductors due to its critical position in the chip supply chain. The company produces machines that chipmakers require to manufacture the most advanced semiconductors, which have not yet been exported to China due to various export controls.
The Bloomberg report suggested that further sanctions under consideration would target Chinese firms making semiconductor manufacturing equipment, rather than the factories that actually make the chips. This is a positive for ASML and other foreign semiconductor equipment firms that sell to fabs.
