Business Maverick: Chipmaker retreat engulfs TSMC, Samsung with $240bn wiped out

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Chip-related stocks in Japan, South Korea and Taiwan slumped as a move by the Biden administration to curb China’s access to US semiconductor technology sparked a selloff that has wiped out more than $240-billion from the sector’s market value globally.

Taiwan Semiconductor Manufacturing plunged more than 7%, the most since May 2021, while Samsung Electronics dropped the most in a year. Tokyo Electron lost as much as 5.8%. Markets in South Korea, Japan and Taiwan were shut on Monday for holidays, when the Philadelphia Stock Exchange Semiconductor Index sank to its lowest close since late 2020 following a two-day rout of over 9%.

“The latest US move would prompt China to move faster in fostering the domestic chip industry,” said Omdia analyst Akira Minamikawa. “Japanese firms should continue trading with Chinese firms with goods not restricted because the business is business. But they should be ready for a future – maybe in a decade or two – when they lose all the Chinese customers as a result of the current tension dialling up speed of the Chinese efforts.

“With the latest measure, it would become difficult for China to manufacture and develop semiconductors because most semiconductor equipment are dominated by the US and its allies, such as Japan and Netherlands,” Chae Minsook, an analyst at Korea Investment & Securities, wrote in a report. “It is impossible to maintain the chip industry without adopting advanced equipment.”

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