Semiconductor shares slump – possibly thanks to Biden and Trump
(2024/07/18)
- Reference: 1721283915
- News link: https://www.theregister.co.uk/2024/07/18/semiconductor_shares_slump_us_politics/
- Source link:
The share price of several major semiconductor producers has taken a sharp dive, seemingly in response to a pair of political developments in the United States.
On Wednesday TSMC shares dipped 7.98 percent on the New York Stock Exchange, while ASML dropped 10.93 percent, Tokyo Electron was off by 9.25 percent, Nvidia dropped 6.62 percent, AMD fell 10.21 percent, and the tech-heavy NASDAQ index fell 2.77 percent – its worst day since 2022.
One of the political events that appears to have soured market sentiment was a [1]report claiming the Biden administration is considering tighter restrictions of chip manufacturing tech to China.
[2]
The fresh restrictions would reportedly hit Tokyo Electron and ASML, which both make chipmaking equipment without which it's impossible to manufacture advanced semiconductors. The potential for further sanctions to harm both businesses is clear, and further closure of the Chinese market is obviously bad news for other chipmakers as it will deprive them of a giant pool of buyers.
[3]US-China chip wars 'mainly ideological' says ex-ASML boss
[4]TSMC chip plant construction halted by discovery of archaeological ruins
[5]ASUS quietly built supercomputers, datacenters and an LLM. Now it's quietly selling them all together
[6]TSMC says first 1.6nm chips coming in 2026
A second item of concern is an [7]interview with Republican presidential candidate Donald Trump, who was asked about whether he would defend Taiwan against China if he returned to the White House, and offered the following:
They did take about 100 percent of our chip business. I think, Taiwan should pay us for defense. You know, we're no different than an insurance company. Taiwan doesn't give us anything. Taiwan is 9,500 miles away. It's 68 miles away from China. A slight advantage, and China's a massive piece of land, they could just bombard it. They don't even need to – I mean, they can literally just send shells. Now they don't want to do that because they don't want to lose all those chip plants. You know, all those plants and they don't want to do that.
That serving of word salad is both inaccurate – Taiwan has not taken all of the US's chip business, and Taiwanese firms like TSMC are building fabs in America – and differs from president Biden's position: that the US would become involved in kinetic conflict to defend Taiwan.
As such, it represents a potential weakening of current US policy. And as Trump accurately assessed, China knows Taiwan's chip plants are a prize – they're among the world's most sophisticated such facilities. They are of such strategic significance that an official from the last Trump administration has [8]suggested they would be destroyed in the event of an invasion.
[9]
Intel – which operates its own foundries, has set up a biz to rent them out, and is less reliant on Taiwanese manufacturers – did not experience a share price drop on Wednesday. Instead, it enjoyed a 0.35 percent upward hop. Which tells you investors feel it isn't impacted by whatever has seen them devalue other semiconductor concerns. ®
Get our [10]Tech Resources
[1] https://www.bloomberg.com/news/articles/2024-07-17/us-considers-tougher-trade-rules-against-companies-in-chip-crackdown-on-china
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZpjnuVtr8Itb6UyX8Gv@RQAAAso&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2024/07/08/us_china_chip_wars_ideological/
[4] https://www.theregister.com/2024/06/18/tsmc_cowos_delayed/
[5] https://www.theregister.com/2024/06/13/asus_enterprise_tech_growth_plans/
[6] https://www.theregister.com/2024/04/25/tsmc_first_16nm_chips/
[7] https://www.bloomberg.com/features/2024-trump-interview-transcript/
[8] https://www.theregister.com/2023/03/14/us_china_tsmc_taiwan/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZpjnuVtr8Itb6UyX8Gv@RQAAAso&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://whitepapers.theregister.com/
On Wednesday TSMC shares dipped 7.98 percent on the New York Stock Exchange, while ASML dropped 10.93 percent, Tokyo Electron was off by 9.25 percent, Nvidia dropped 6.62 percent, AMD fell 10.21 percent, and the tech-heavy NASDAQ index fell 2.77 percent – its worst day since 2022.
One of the political events that appears to have soured market sentiment was a [1]report claiming the Biden administration is considering tighter restrictions of chip manufacturing tech to China.
[2]
The fresh restrictions would reportedly hit Tokyo Electron and ASML, which both make chipmaking equipment without which it's impossible to manufacture advanced semiconductors. The potential for further sanctions to harm both businesses is clear, and further closure of the Chinese market is obviously bad news for other chipmakers as it will deprive them of a giant pool of buyers.
[3]US-China chip wars 'mainly ideological' says ex-ASML boss
[4]TSMC chip plant construction halted by discovery of archaeological ruins
[5]ASUS quietly built supercomputers, datacenters and an LLM. Now it's quietly selling them all together
[6]TSMC says first 1.6nm chips coming in 2026
A second item of concern is an [7]interview with Republican presidential candidate Donald Trump, who was asked about whether he would defend Taiwan against China if he returned to the White House, and offered the following:
They did take about 100 percent of our chip business. I think, Taiwan should pay us for defense. You know, we're no different than an insurance company. Taiwan doesn't give us anything. Taiwan is 9,500 miles away. It's 68 miles away from China. A slight advantage, and China's a massive piece of land, they could just bombard it. They don't even need to – I mean, they can literally just send shells. Now they don't want to do that because they don't want to lose all those chip plants. You know, all those plants and they don't want to do that.
That serving of word salad is both inaccurate – Taiwan has not taken all of the US's chip business, and Taiwanese firms like TSMC are building fabs in America – and differs from president Biden's position: that the US would become involved in kinetic conflict to defend Taiwan.
As such, it represents a potential weakening of current US policy. And as Trump accurately assessed, China knows Taiwan's chip plants are a prize – they're among the world's most sophisticated such facilities. They are of such strategic significance that an official from the last Trump administration has [8]suggested they would be destroyed in the event of an invasion.
[9]
Intel – which operates its own foundries, has set up a biz to rent them out, and is less reliant on Taiwanese manufacturers – did not experience a share price drop on Wednesday. Instead, it enjoyed a 0.35 percent upward hop. Which tells you investors feel it isn't impacted by whatever has seen them devalue other semiconductor concerns. ®
Get our [10]Tech Resources
[1] https://www.bloomberg.com/news/articles/2024-07-17/us-considers-tougher-trade-rules-against-companies-in-chip-crackdown-on-china
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZpjnuVtr8Itb6UyX8Gv@RQAAAso&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2024/07/08/us_china_chip_wars_ideological/
[4] https://www.theregister.com/2024/06/18/tsmc_cowos_delayed/
[5] https://www.theregister.com/2024/06/13/asus_enterprise_tech_growth_plans/
[6] https://www.theregister.com/2024/04/25/tsmc_first_16nm_chips/
[7] https://www.bloomberg.com/features/2024-trump-interview-transcript/
[8] https://www.theregister.com/2023/03/14/us_china_tsmc_taiwan/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZpjnuVtr8Itb6UyX8Gv@RQAAAso&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://whitepapers.theregister.com/
Re: "Taiwan doesn't give us anything"
veti
Trump is trying to extort Taiwan because he sees the presidency as being a godfather of mafia. What he's selling here is the fantasy to his voters that foreigners will pay the US for its protection.
It won't work, obviously[1] - any more than Mexico paid for those few miles of glorified garden fence - but that's okay. For one thing, that failure won't be clear until after he's elected, so who cares anyway. And secondly, he is cannily not actually saying to his supporters that "these rich foreigners will pay more taxes so you won't have to", he's just suggesting it, with plenty of deniability. He's selling a dream of raw greed. He's good at that, he's been doing it for 40 years.
[1] and any thinking American wouldn't want it to work. Having foreigners finding your navy , of all things, is not a happy place to be, strategically.
Re: "Taiwan doesn't give us anything"
MJI
Well trump does appear to be one.
TSMC is possibly one of the most important companies worldwide
Déjà vu…
Reiki Shangle
Intel, the British Leyland of the chip industry…
My PCs
MJI
I know they are not cheapest, but I like to use ASUS components, 3 PCs all reliable using them.
"Taiwan doesn't give us anything"
Of course not, but that is not why there are US carrier fleets nearby. Those fleets are nearby to ensure that Taiwan is not absorbed in to China, which could then cut off supply to The West globally, which would be a major catastrophe for IT in general and all those fancy gadgets DARPA likes to get its hands on like, oh, hypermissiles at a guess. Or all those fancy self-piloted "assistants" that are supposed to be delivered with every new F-35 at some point in the future.
Trump appears hell-bent on not spending a dime on anything. He's missing the fact that, if the USA has the economic and international situation it enjoys today, it is because it is present on the seven seas and the five continents and ready to be aggressive if need be, with the best tools there are. Bring all that military back home and your influence is going to shatter to pieces, leaving someone else to pick up the slack (that someone being Beijing at this point in time).
You really have to be a moron to not see that.