Top Line
Asian semiconductor shares also fell sharply on Thursday, following a sharp drop in tech shares on Wall Street the previous day, a sign of caution amid concerns the United States is poised to impose further trade restrictions on semiconductor technology as investors expect President Donald Trump to be re-elected.
Former US President Donald Trump said Taiwan … [+]
Key Facts
Taiwan Semiconductor Manufacturing Company (TSMC) shares fell 2.43% by the close of the Taipei market on Thursday.
TSMC raised its full-year revenue forecast and announced that its net sales rose 40% year-over-year as demand for its products surged on the back of the global AI boom.
South Korea’s SK Hynix and Japan’s Tokyo Electron suffered heavy losses, falling 3.6% and 8.75% by the close of markets in Seoul and Tokyo, respectively. Shares in Japanese investment giant SoftBank, which owns a majority stake in British semiconductor maker Arm Holdings, also fell 2%.
Samsung Electronics, the semiconductor unit of the South Korean tech giant, escaped relatively unscathed: its shares fell more than 3% during the trading session but rebounded within the last hour of trading to close up 0.23%.
Why are tech stocks falling after President Trump’s Taiwan remarks?
The sharp drop in Asian semiconductor stocks comes on the heels of a day of blows for U.S.-listed tech stocks amid growing concerns about the semiconductor industry plans of both President Joe Biden and former President Donald Trump. Bloomberg reported on Wednesday that Biden is considering imposing tougher trade restrictions on semiconductor technology, given that international companies such as Tokyo Electron and ASML Holdings of the Netherlands have allowed China access to it. The advanced technology is vital to the lucrative semiconductor industry that underpins the entire tech sector, and Washington sees dominance in the sector as a strategic priority for the economy and national security. Meanwhile, amid growing concerns about Biden’s ability to do his job, Trump, who is expected to retake the White House in November after surviving an assassination attempt, suggested the U.S. would not defend Taiwan if China invades it, and insisted Taipei “should pay” for its defense to Washington. The autonomous region, which China claims as part of its territory, is by far the world’s hub for semiconductor manufacturing, and companies in the region are major suppliers to U.S. tech giants such as Apple and Nvidia. Trump accused the island of getting rich off “stealing” U.S. microchip production, raising concerns about the island’s industrial future and security if he returns to the White House. Tech stocks have taken a hit since, with companies including Apple, Nvidia, Amazon, Meta and Microsoft losing more than $500 billion in combined market capitalization.
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