TSMC Stock Plummets Over 7%... Impact of US Semiconductor Export Restrictions to China

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Following the announcement of the U.S. restrictions on semiconductor exports to China, major Asian semiconductor companies such as Taiwan's TSMC and Samsung Electronics have seen their stock prices plummet on the 11th.

According to Bloomberg News, TSMC, the world's largest foundry (semiconductor contract manufacturing) company, saw its stock price fall more than 7% immediately after the Taiwan stock market opened this morning, marking the largest drop since May last year. Since the Taiwan stock market was closed the previous day due to a public holiday, the impact of the U.S. semiconductor regulations announced on the 7th (local time) is believed to have affected the market all at once today.

Samsung Electronics, a major domestic semiconductor company, also saw its stock price fall more than 3% this morning, while SK Hynix traded with a decline of around 1%.

The semiconductor stock plunge began with the U.S. New York stock market. On the 10th, the Nasdaq index, which is technology stock-focused, closed at 10,542.10, the lowest level in two years, due to the semiconductor stock sell-off. The Nasdaq index has fallen more than 32% this year.

With the formalization of restrictions on exports of advanced U.S.-made semiconductors and equipment to China, the Philadelphia Semiconductor Index fell 3.5% in a single day, closing at its lowest level since November 2020. Major U.S. semiconductor companies such as Nvidia (-3.36%), AMD (-1.08%), Qualcomm (-5.22%), and Intel (-2.02%) all saw their stocks decline simultaneously. Lam Research slid 6.43%, and Marvell dropped 4.84%.

Earlier, on the 7th, the U.S. Department of Commerce officially announced export control measures banning the sale of U.S.-made advanced semiconductor equipment to Chinese semiconductor manufacturers and restricting exports of semiconductor chips used in artificial intelligence (AI) and supercomputers. Specifically, equipment and technology capable of producing semiconductors exceeding ▲18 nanometers (nm; 1 nm is one-billionth of a meter) DRAM ▲128-layer NAND flash ▲logic chips using FinFET technology (16 nm to 14 nm) require U.S. companies to obtain permission before selling to China.

Regarding this, market research firm TrendForce stated on the 8th that semiconductor companies would be affected by the U.S. Department of Commerce's measures. In the case of TSMC, it predicted that "whether future U.S. factories can no longer export to the Chinese market and whether Chinese factories can proceed with projects and large-scale production will negatively impact the future order status of TSMC's 7nm and 5nm processes."

TrendForce also noted that Samsung's Xi'an factory and SK Hynix's plan to relocate Solidigm's Dalian factory are likely to be affected, adding, "Due to these sanctions, global memory semiconductor companies such as Samsung Electronics and SK Hynix are expected to reduce their production share in China and strive to increase domestic production capacity."

Jefferies Financial Group analyzed, "The new regulations will intensify headwinds surrounding Chinese business in two areas: broad restrictions on supercomputer semiconductors and limitations on multinational capital investment within China."

This content was produced with the assistance of AI translation services.