U.S. chip stocks volatile after Asian dip with China-U.S. spat in focus

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Chip stocks took a dive after a report said the Biden administration was weighing a measure that would allow the U.S. government to stop a product from being sold if it was made using American technology

Trading in U.S. chip stocks was choppy on Thursday after a massive sell-off on Wednesday and a tumble in chip stocks in Asia after a report that the United States was considering tighter curbs on exports of advanced chip technology to China.

The Global X Asia Semiconductor exchange-traded fund closed down 1.74 per cent on Thursday with declines in major holdings including SK Hynix, Tokyo Electron, Taiwan Semiconductor Manufacturing Co , and Samsung Electronics. But Daniel Morgan, portfolio manager at Synovus Trust sees more volatility ahead with chip company earnings due in coming weeks and both U.S. Presidential candidates, Donald Trump and Joe Biden, “taking a tough line” on trade.

But he noted that investors were equally worried about Trump implementing tariffs when he was President yet “chip companies have survived and have done extremely well since then.” It likely helped that TSMC, the world’s largest contract chipmaker, raised its full-year revenue forecast on Thursday on surging artificial intelligence related demand for chips.

 

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