US chip stocks volatile as potential trade restrictions with China loom, some companies impacted

From Yahoo Finance: 2024-07-18 12:26:11

Trading in U.S. chip stocks was volatile on Thursday after reports of potential tighter export curbs to China. Semiconductor stocks plummeted following news that a new U.S. measure could halt product sales using American technology, impacting companies like Tokyo Electron and ASML. The Global X Asia Semiconductor ETF fell 1.74% with major holdings like SK Hynix and Samsung Electronics declining. The Philadelphia Semiconductor index reversed earlier gains to close down 0.8% after a 6.8% drop on Wednesday.

Analysts saw the sell-off as a buying opportunity, with potential trade restrictions viewed as unlikely in the near term. However, upcoming chip company earnings and the stance of U.S. Presidential candidates on trade could lead to further volatility. Some investors expressed concerns over companies with significant sales exposure to China, exemplified by the 11% drop in ASML shares.

Despite the challenges, some U.S. chip stocks made gains, with Intel rising 3.8% and NXP Semiconductor up more than 1%. Nvidia and AMD showed mixed results, while TSMC struggled with a 3.6% drop in U.S.-traded shares following significant losses in Asia. TSMC revised its revenue forecast upwards on increased demand for AI-related chips, but faced additional pressure from political statements.

In Europe, ASML shares declined, and in Asia, SK Hynix and Tokyo Electron also saw significant drops. The uncertainty surrounding potential trade restrictions and political tensions added to the ongoing volatility in the semiconductor market. Despite challenges, there were signs of resilience, with some companies, including TSMC, focusing on growth opportunities in high-demand areas like AI chips.



Read more at Yahoo Finance: US chip stocks volatile after Asian dip with China-US spat in focus