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18/07/24
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Volatility In US Chip Stocks, Focus on China-US Tensions
On Thursday, trading in U.S. chip stocks was volatile after Wednesday’s huge sell-off and a decline in chip stocks in Asian trading after reports that the U.S. was weighing more curbs on exports of chip technology to China.
On Wednesday, semiconductor stocks dropped after a report by Bloomberg News that President Joe Biden’s administration was considering a measure that would permit the U.S. government to prevent a product from being sold if it was manufactured using American technology.
If it happens, the move could potentially mean restrictions on companies like the Netherlands’ ASML and Tokyo Electron.
On Thursday, the Global X Asia Semiconductor exchange-traded fund closed 1.74% lower with drops in major holdings including Tokyo Electron, SK Hynix, Samsung Electronics, and Taiwan Semiconductor Manufacturing Co.
The Philadelphia Semiconductor index opened 1.7% higher on Thursday and then reversed course and 0.8% lower for the day. This came after a 6.8% fall on Wednesday, the biggest one-day decline since March 2020.
Some analysts interpreted the sell-off on Wednesday as a signal to hunt for bargains. Evercore ISI’s Vedvati Shrotre said that the short-term probability the trade curbs would be implemented was low and added the short-term weakness was a unique buying opportunity.
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