Shares of Taiwan Semiconductor Manufacturing Co. fell more than 7%, the highest since May 2021, while Samsung Electronics fell at the fastest pace in a year, while Tokyo Electron Co., Ltd. lost 5.8%. .
Markets in South Korea, Japan and Taiwan were closed on Monday for the holidays as the Philadelphia Semiconductor Index fell to its lowest close since late 2020 after a two-day loss of more than 9%.
This comes after the US announced export restrictions on Friday, as it has been suggested that similar measures could be implemented in other countries to ensure international cooperation.
The latest restrictions are likely to directly feed the industry supply chain and add to a growing list of challenges for tech stocks, including Fed monetary tightening and tensions in the Taiwan Strait.
The recent declines have already wiped out more than $ 240 billion in the market value of chip shares worldwide since the close on Thursday, according to data compiled by Bloomberg and viewed by Al Arabiya.net.
For its part, Chinese media and state officials have reacted to Biden’s move in recent days, warning of the economic consequences and raising speculations about possible retaliation.
“With the latest measure, it will be difficult for China to produce and develop semiconductors because most semiconductor equipment is dominated by the United States and its allies, such as Japan and the Netherlands,” Chae Minseok, analyst at Korea Investment and Securities , wrote in a report.
“It is impossible to sustain the chip industry without the use of advanced equipment,” he added.
The measures are aimed at halting China’s plan to develop its chip industry and increase its military capabilities.
They include restrictions on the export of certain types of chips used in artificial intelligence and supercomputing, and stricter rules on the sale of semiconductor manufacturing equipment to any Chinese company.
The US is also trying to ensure that Chinese companies do not transfer technology to the country’s military and that Chinese chip makers do not develop the capabilities to make advanced semiconductors themselves.
The restrictions represent a “big setback for China and bad news for the global semiconductor industry,” Nomura Holdings analyst David Wong said in a statement Monday.
He said China’s localization efforts for the industry could be “at risk because it may not be able to use advanced foundries in Taiwan and Korea.”
