Chinese Semiconductor shares rise as
TSMC halts advanced chip segments
- TSMC began suspending shipments of advanced chips to Chinese customers due to US export restrictions
- SMIC’s stock surged by 4.7%, hitting a record high as investors bet on China’s self-reliance efforts
- The CSI Semiconductor Index rose over 6%, reflecting optimism in China’s semiconductor sector
- Analysts expect the US restrictions to boost demand for China’s domestic chip production and technology
- TSMC’s share price briefly dropped but later recovered due to strong fundamentals and record sales
The shares of semiconductor companies in China surged after reports that the U.S. had ordered Taiwan Semiconductor Manufacturing Co (TSMC) to halt shipments of advanced chips to Chinese clients. This move is seen as accelerating China’s push for self-reliance in semiconductor production. TSMC suspended shipments of chips with 7-nanometer designs and more advanced technology, following a directive from the U.S. Department of Commerce. This led investors to buy shares in Chinese companies like Semiconductor Manufacturing International Corp (SMIC), driving up their stock prices. SMIC, which is the largest chipmaker in China and a key supplier to Huawei, saw a 4.7% increase in its stock. Other semiconductor indices in China also saw significant gains.
Analysts believe that the U.S. restrictions will prompt China to strengthen its domestic semiconductor capabilities, leading to breakthroughs in upstream equipment and materials. Despite the initial dip in TSMC’s stock price, analysts noted the company’s strong fundamentals and a recovery in its shares. The impact on TSMC was brief, as its sales remain robust. Investors have also speculated that the re-election of Donald Trump could favour China’s strategic sectors, further supporting the sector’s growth.
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