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Chip stocks in Asia tumbled again on Thursday after a bruising selloff of tech stocks on Wall Street the day before, a sign of caution amid concerns the U.S. is poised to slap more trade restrictions on semiconductor technology as investors anticipate a second Donald Trump presidency.
Former U.S. President Donald Trump sparked turmoil in tech markets when he suggested Taiwan should … [+]
Key Facts
Shares of Taiwan Semiconductor Manufacturing Company (TSMC) fell 2.43% by market close in Taipei on Thursday.
TSMC raised its annual revenue forecasts and reported a 40% jump in net revenues from a year ago amid booming demand for its products on the back of the global AI boom.
South Korean firm SK Hynix and Japan’s Tokyo Electron suffered heavy losses, respectively down 3.6% and 8.75% in Seoul and Tokyo by market close, and shares of Japanese investing giant SoftBank, which owns the vast majority of British chipmaker Arm Holdings, also fell 2%.
Samsung Electronics, the semiconductor arm of the South Korean tech behemoth, managed to escape relatively unscathed, with shares dipping more than 3% in trading hours but rallying within the last hour of trading to close 0.23% up.
Why Are Tech Stocks Falling After Trump’s Taiwan Comments?
The chip stock slump in Asia comes on the heels of a bruising day for U.S.-listed tech stocks amid increasing concern over both President Joe Biden and former President Donald Trump’s plans for the sector moving forward. Bloomberg on Wednesday reported Biden is considering enacting even tougher trade restrictions on semiconductor technology in light of international firms like Tokyo Electron and the Netherlands’ ASML Holding allowing China to access the technology. The advanced technology is vital to the lucrative semiconductor industry that underpins the entire tech sector and Washington views its supremacy in the field as a strategic priority for the economy and national security. Meanwhile Trump, who is favored to retake the White House in November amid growing concerns over Biden’s ability to serve and after surviving an assassination attempt, suggested the U.S. would not defend Taiwan in the event of a Chinese invasion and insisted Taipei “should pay” Washington for its defense. The self-governed territory, which Beijing claims as part of its territory, is far and away the global hub for semiconductor manufacturing and its firms are major suppliers to U.S. tech giants like Apple and Nvidia. Trump accused the island of growing rich by “stealing” U.S. microchip production, raising concerns over the industry’s future and security of the island should he retake the White House. Tech stocks suffered in the aftermath, with firms like Apple, Nvidia, Amazon, Meta and Microsoft collectively shucking more than $500 billion in market value.
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