Global technology stocks experienced a decline amid concerns about the semiconductor industry following reports of potential export restrictions on semiconductor equipment to China by the Biden administration. The Nasdaq index in the US closed 2.7% lower while chip stocks in Europe and Asia also suffered losses. The fear of increased restrictions has led to a sell-off, with prominent companies like TSMC and ASML facing significant drops in their stock prices.
Analysts like Bob O’Donnell of TECHnalysis Research believe that regardless of the election outcome, the US is likely to tighten restrictions on semiconductor exports, but the extent of these measures remains uncertain. The fear of restrictions on exports to China has caused worry in the industry, with companies like ASML and Tokyo Electron potentially facing tighter curbs on their technologies.
Former President Donald Trump’s comments regarding Taiwan’s role in the defense sector and the country’s impact on global chip supplies have added to the uncertainty in the industry. However, executives like Marco Mezger of Neumonda believe that despite the short-term fluctuations, the long-term growth trend in the semiconductor sector remains positive.
The US Commerce Department, ASML, and Tokyo Electron declined to comment on the situation when contacted by BBC News. Previously, the Biden administration has taken steps to limit China’s access to advanced chip technology, with restrictions on exports of semiconductors used in AI technology. Overall, while the market is reacting to the potential restrictions and geopolitical tensions, experts remain optimistic about the future of the semiconductor industry.
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