China chip stocks drop as US tightens rules on tech access
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Hua Hong Semiconductor and Shanghai Fudan Microelectronics Group plunged more than 8 per cent each in Hong Kong.
PHOTO: REUTERS
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SINGAPORE - Chinese semiconductor stocks declined after fresh US curbs on China's access to American technology added to a disappointing start to the earnings season, stoking concerns that the industry's downturn is far from over.
Bellwether Semiconductor Manufacturing International Corp slumped as much as 5.2 per cent in Hong Kong on Monday, the most since Aug 15.
This compares with a 6.1 per cent drop in the Philadelphia Semiconductor Index on Oct 7, the most in almost a month following strong labour market data that reinforced expectations for more aggressive interest rate hikes by the Federal Reserve.
Hua Hong Semiconductor and Shanghai Fudan Microelectronics Group plunged more than 8 per cent each in Hong Kong, while Will Semiconductor fell as much as 6.7 per cent in Shanghai.
The US measures include restrictions on the export of some types of chips used in artificial intelligence and supercomputing, and also tighter rules on the sale of semiconductor equipment to any Chinese company.
Separately, the United States also added more Chinese firms to a list of companies that it regards as "unverified", which means US suppliers will face new hurdles in selling technologies to those entities.
Chinese Foreign Ministry spokesman Mao Ning said on Saturday that the measures, which are set to enter into force this month, are unfair and will "also hurt the interests of US companies", according to an official briefing transcript.
The curbs "deal a blow to global industrial and supply chains and world economic recovery", she said.
The new US rules come at a time when the chip industry is already grappling with an ominous start to the earnings season.
Samsung Electronics, the world's largest memory chip maker, and PC processor maker Advanced Micro Devices reported results last week that suggested a deeper-than-feared slowdown ahead.
Chinese stocks may anchor the sector globally on Monday as the markets of Japan, South Korea, Taiwan and Malaysia are closed. BLOOMBERG
