Stocks of prominent global semiconductor equipment companies saw a substantial increase on Thursday following a report that the U.S. is contemplating imposing sanctions on China’s chip industry that are less stringent than previous proposals.
ASML shares increased by approximately 3.6% during early trading in Europe while Tokyo Electron shares rose by over 6% in Japan.
According to a Bloomberg report on Wednesday, the U.S. is contemplating additional restrictions on the sale of semiconductor equipment and AI memory chips to China. However, these new regulations could be less comprehensive than earlier proposals deemed to be stricter.
Consequently, fewer suppliers to Chinese tech giant Huawei could be added to the U.S. export blacklist known as the Entity List, with ChangXin Memory Technologies, a potential competitor to industry giants like SK Hynix and Samsung, being out of the equation.
Based on a Jefferies analysis, given ASML’s statements of a projected 30% decrease in its revenue from China next year, the company’s sales in China could decline less than anticipated if the company is excluded from the sanctions.
Meanwhile, according to a Bloomberg report, impending sanctions may primarily target Chinese firms engaged in the fabrication of semiconductor manufacturing equipment, not the ones manufacturing the chips themselves. This shift in focus could potentially be advantageous for ASML and other overseas equipment companies that market their products to fabrication plants.
