- Shares in Chinese tech giants Alibaba Group Holding Limited (NYSE:BABA) and Tencent Holding Ltd (OTC:TCEHY), along with the chipmakers, slumped as the U.S. slapped export control measures aimed at slowing Beijing’s technological and military advances, Reuters reported.
- The U.S. introduced a sweeping set of export controls, including a measure to cut China off from certain semiconductors made anywhere in the world with U.S. equipment.
- The new controls coincided with the global chip industry battling significant headwinds from tumbling demand post-COVID in computers, smartphones, and other electronic devices.
- U.S. companies must cease supplying Chinese chipmakers with equipment that can produce relatively advanced chips – logic chips under 16 nm, DRAM chips below 18 nm, and NAND chips with 28 layers or more unless they first obtain a license.
- Analysts expect the impact on leading contract chipmaker Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) thanks to its U.S.-based customers such as Apple Inc (NASDAQ:AAPL) and Qualcomm Inc (NASDAQ:QCOM). However, it generates around 10-12% of its revenue from China.
- Analysts said the new regulations would pose significant hurdles for the two Chinese memory chipmakers, Yangtze Memory Technologies Co Ltd and Changxin Memory Technologies.
- Price Action: BABA shares traded lower by 1.44% at $80.07 in the premarket on the last check Monday.
- Photo via Pixabay
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