Following the United States announcement of stringent new restrictions on technology exports to China, shares of key Asian computer chipmakers have declined.
The United States has announced that it will prohibit American companies from selling semiconductors used in supercomputers and artificial intelligence to Chinese companies.
The guidelines, which were unveiled on Friday, also target foreign corporations that utilize American equipment for exports.
As the global economy slows, technology companies also experience a decrease in demand.
On Tuesday, shares of Taiwanese chipmaker TSMC sank more than 8%, those of Tokyo Electron in Japan dropped 5.5%, and those of Samsung Electronics in South Korea fell 1.5%.
The declines occurred after stock markets in Taiwan, Japan, and South Korea reopened on Tuesday after being closed on Monday for public holidays.
In other parts of Asia, shares of China’s largest chip manufacturer SMIC plummeted 4% in Hong Kong.
Under the requirements, U.S. companies that wish to supply Chinese chipmakers with equipment that can build more advanced chips must apply for a license.
Washington stated that the limits were intended to limit China’s technological and military advancements.
The restrictions, some of which are effective immediately, represent one of the most significant adjustments in US policy regarding technology exports to China in decades.
The technology-heavy Nasdaq index closed at its lowest level since July 2020 in the United States on Monday, after shares of chipmakers Intel, Nvidia, Qualcomm, and Advanced Micro Devices declined.
In recent weeks, weaker demand for electronic devices ranging from computers to smartphones has also weighed on the performance of global technology stocks.
Friday, the South Korean technology giant Samsung predicted a 32% decline in earnings.
The world’s largest smartphone manufacturer reported a decline in profitability from its microprocessor manufacturing business as global memory chip prices fell due to a decline in demand for consumer electronics.
Sonal Varma and Si Ying Toh, research analysts at Nomura, stated, “The chip slowdown signals a further decrease in exports is forthcoming.”
“So far, export growth has already gone negative in September in India, but the evidence is mounting that export growth will turn negative in Q4 across more Asian economies,” they wrote in a Tuesday note.
