Quiver Markets Wrap: Semiconductors Lose $500B in Sell-off

Wall Street's semiconductor index lost more than $500 billion in stock market value on Wednesday in its worst session since 2020 after a report said the United States was mulling tighter curbs on exports of advanced semiconductor technology to China. Remarks from Republican presidential nominee Donald Trump saying key production hub Taiwan should pay the United States for its defense deepened selling in chip stocks. The latest worries for chip investors come after Washington in recent years has adopted a more protective stance for the U.S. semiconductor manufacturing industry, which it views as strategically important for competing against China. The United States has told allies it is considering using the most severe trade curbs available if companies continue giving China access to advanced semiconductor technology, Bloomberg News reported on Tuesday. U.S.-listed shares of Dutch chipmaking equipment provider ASML (ASML) slumped 13% following the report even though it beat second-quarter profit estimates. AI heavyweight Nvidia (NVDA) fell almost 7%, losing more than $200 billion in market capitalization. Market Overview:

• Semiconductor index lost over $500 billion in value.
• Trump’s comments about Taiwan added to the selloff.
• ASML and Nvidia faced significant declines.

Key Points:

• U.S. mulling tighter curbs on chip exports to China.
• AMD and Micron also saw notable drops.
• Intel and GlobalFoundries gained amidst the turmoil.

Looking Ahead:

• Continued U.S.-China tensions likely to impact markets.
• Potential further restrictions on chip technology exports.
• Focus on domestic semiconductor manufacturing support.

Companies with U.S. chip manufacturing operations gained, with GlobalFoundries jumping almost 7% and Intel edging 0.35% higher. Some analysts believe Intel could benefit from the geopolitical tensions as it is building several plants in the country. President Joe Biden's administration has moved aggressively to curb Chinese access to cutting-edge chip technology, including sweeping restrictions issued in October to limit exports of AI processors designed by firms including Nvidia. Trump, seeking to regain the presidency in the Nov. 5 U.S. election, told Bloomberg Businessweek that Taiwan should pay the United States for its defense as it does not give the country anything. That sent U.S.-listed shares of Taiwan's TSMC (TSM) down 8%. The Philadelphia Semiconductor index collapsed 6.8% in its biggest one-day decline since the COVID pandemic sent global markets into a tailspin. Intel has been investing heavily to restore a manufacturing edge it lost to TSMC. It is also one of the biggest beneficiaries of the U.S. Chips Act signed by Biden in August 2022, with $52.7 billion in subsidies.