MW ASML, other chip-related companies rally on report of possible ease in U.S. restrictions on sales to China

By Barbara Kollmeyer

Shares of several global chip-related companies surged on Thursday, following a report that U.S. officials are considering less-stringent restrictions on sales to China.

Shares of ASML Holding NV (NL:ASML) $(ASML)$ climbed over 4% in Europe, while ASM International NV (NL:ASM) rose more than 3%. Even bigger gains were seen in Japan where Kokusai Electric Corp. (JP:6525) surged 12%, while Tokyo Electron Ltd (JP:8035) and SCREEN Holdings Co., Ltd (JP:7735) rose over 6% each.

The gains were seen following a Bloomberg report that said the U.S. administration was considering more measures to curb sales of chip- equipment and AI memory chips to China, but they may be less strict than initially planned.

Negotiations between officials in the U.S., Japan and Netherlands have been ongoing for months over the curbs, the report said, citing sources. U.S. chip equipment makers such as Lam Research Corp. $(LRCX)$ and Applied Materials Inc. $(AMAT)$ have argued that they would be at a disadvantage to Dutch and Japan chip giants whose governments have yet to sign onto tougher China measures. Shares of those companies each closed down over 1% on Wednesday. U.S. markets are closed Thursday in observance of the Thanksgiving Day holiday.

The latest measures on the table would sanction fewer suppliers to heavyweight Huawei Technologies Co. while ChangXin Memory Technologies Inc. is among those being excluded. However, two Semiconductor Manufacturing International Corp owned chip factories are facing restrictions under the new plan, the sources said. Shares of Semiconductor Manufacturing International (HK:981) fell over 2% in Hong Kong on Thursday.

Others swept up would include China semiconductor manufacturing equipment companies, instead of chip-making fabrication entities, the report said.

Makers of high-bandwidth memory chips such Micron Technology Inc. $(MU)$, will also take a hit from the new measures, the sources said. Shares of Korean rivals in that space, Samsung Electronics Co. (KR:005930) and SK Hynix Inc. (KR:000660), fell 1% and 4%, respectively, on Thursday.

The past several years have seen the Biden administration seek to curb China's access to chips used to power artificial intelligence and few expect that situation to ease under incoming President Donald Trump's administration.

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The sources told Bloomberg that the new measures could roll out as soon as next week, but plans could change before that.

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-Barbara Kollmeyer

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November 28, 2024 05:13 ET (10:13 GMT)

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