Brussels, Belgium – Shares of major global semiconductor equipment companies surged on Thursday following reports that the U.S. is contemplating sanctions on China’s chip industry. The measures being considered are not as stringent as previously proposed, leading to a positive reaction from investors.
ASML, a prominent player in the semiconductor industry, saw its stock rise by 3.6% in early European trading. Similarly, Tokyo Electron experienced a more than 6% increase in Japan where it is traded.
According to a report by Bloomberg, the U.S. government is exploring additional restrictions on the sale of semiconductor equipment and AI memory chips to China. However, these new rules are expected to be less severe than previous proposals. The U.S. Commerce Department’s Bureau of Industry has not yet commented on the report.
One of the key aspects mentioned in the report is that fewer suppliers, including ChangXin Memory Technologies, will be added to the Entity List export blacklist. ChangXin Memory Technologies is a significant Chinese memory company that poses a potential challenge to competitors like SK Hynix and Samsung.
Analysts at Jefferies noted that ASML had predicted a 30% decline in revenue from China in the coming year. The exclusion of ChangXin Memory Technologies from the blacklist could result in a less drastic decrease in ASML’s sales in China. This news was well received by investors, leading to a boost in the company’s stock price.
ASML has been at the center of the ongoing technological rivalry between the U.S. and China due to its critical role in the semiconductor supply chain. The Dutch company produces machines essential for manufacturing advanced semiconductors, although these machines have not been exported to China due to export controls.
Recent restrictions imposed by the Dutch and U.S. governments have made it increasingly challenging for ASML to export less advanced machines to China. The potential sanctions under consideration are aimed at Chinese firms involved in semiconductor manufacturing equipment, rather than directly targeting chip factories. This development is seen as a positive for ASML and other foreign semiconductor equipment companies that supply to semiconductor plants worldwide.