Shares of semiconductor companies across Asia and Europe declined on Thursday amid concerns that the U.S. might impose further restrictions on technology exports to China. Additionally, Republican presidential candidate Donald Trump’s comments questioning the U.S. stance on Taiwan’s defense contributed to market unease.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chip maker, reported a significant surge in second-quarter profit, surpassing analysts’ expectations due to robust demand for its advanced chips and growing interest in artificial intelligence. Despite this, TSMC’s shares closed 2.4% lower in Taipei.
The strong earnings were overshadowed by a Bloomberg report on Wednesday suggesting that Washington could impose additional restrictions on technology exports to China, a crucial market for semiconductor companies. Meanwhile, Trump told Bloomberg Businessweek that Taiwan should pay the U.S. for its defense, unsettling investors due to Taiwan’s key role in the chip-making industry amid ongoing tensions with China, which claims the self-governed island as its territory.
In Tokyo, shares of SoftBank Group, the parent company of British chip designer Arm Holdings, fell by 6.1%, while chip-making equipment manufacturer Tokyo Electron saw a nearly 8.8% decline.
ASML Holding, Tokyo Electron’s European rival, closed 11% lower on Wednesday following the Bloomberg report, which raised investor concerns about the potential impact of export controls on ASML’s business in China, a major sales region. Despite reporting better-than-expected orders and earnings for the second quarter, ASML’s shares were down 1% on Thursday. Additionally, shares of Infineon Technologies and Apple supplier STMicroelectronics in Europe both fell by more than 1%.
