Semiconductor stocks fell globally on Tuesday as an expected visit by U.S. House of Representatives Speaker Nancy Pelosi to Taiwan, which China claims as its territory, fueled a fresh escalation in tensions between Washington and Beijing.
Taiwan is home to the world's biggest manufacturer of semiconductors on contract, Taiwan Semiconductor Manufacturing Co Ltd . Shares of the company closed down 2.4 per cent, while peer United Microelectronics Corp fell 3 per cent. "The outlook for trade in Asia is likely to weigh on semiconductors, given how much of the world's global production comes from Taiwan," said Michael Hewson, chief markets analyst at CMC Markets UK.
"This market reaction is expected following the strong performance of equity markets in July," said Andrea Cicione, head of strategy at TS Lombard in London.
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