Shares of ASML, Nvidia and TSMC fell after Bloomberg reported that the United States is considering introducing tougher export restrictions on companies that continue to provide China with access to advanced semiconductor technologies. This also stems from Donald Trump’s claim that Taiwan has taken over “about 100%” of the US semiconductor business.
Image Source: ASML
According to Bloomberg sources, the US is considering introducing a measure called the Foreign Direct Product Rule (FDPR), which would require companies from third countries to obtain a license from US authorities if their exported products use US technology.
Chip equipment supplier ASML fell 10% in morning trading, CNBC reported, while shares of another equipment maker vital to the semiconductor industry, Tokyo Electron in Japan, closed down nearly 7.5%, sending the Japanese Nikkei 225 Stock Average index. Other chip manufacturing equipment suppliers, including Lasertec Corp. and Screen Holdings Co. were also among the hardest hit by the market decline.
It should be noted that ASML shares fell in price despite the fact that the company reported profits for the second quarter, which exceeded expert forecasts. And at the same time, 49% of sales of its equipment in the reporting quarter came from China, which indicates how much the company is at risk if export restrictions are tightened.
Adding to the tension were comments from the former US president, who said in an interview with Bloomberg Businessweek published on Tuesday that Taiwan should pay the US for defense and that Taiwan had taken over almost all of the US semiconductor business.