Semiconductor stocks dropped by more than 4% on Wednesday 17 July 2024. Analysts attributed this to the possibility of stricter US export rules and Donald Trump’s remark that Taiwan should pay for defence, after which Taiwan Semiconductor Manufacturing Company Limited (TSM) shares dropped by 6%.
Microchip Stocks Stumble After Trump Remark And Possible Export Limits
According to Reuters information, TSM is the world’s leading chipmaker, with its products featuring in everything from AI applications to fighter jets. Washington reportedly indicated that it may revert to the “most severe trade curbs” should firms continue to supply China with top-shelf technology.
Recently, the current US administration implemented stringent measures to limit China’s access to these semiconductors and other technologies, which already include tight export curbs. These restrictions affected the bottom lines of chipmakers.
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Other microchip manufacturers also stumbled on the back of the possibility of such restrictions. ASML Holding (ASML) lost roughly 9%, even though its Q2 results beat market predictions. Nvidia Corporation (NVDA) was close to 7% down when the final bell rang on Wednesday.
Advanced Micro Devices (AMD) lost more than 10% on the day and was joined on this downtrend by Qualcomm (QCOM), Micron Technology (MU) and Arm Holdings (ARM). The exception was Intel (INTC), which ended Wednesday’s trading 0.35% in the green. Intel is focusing on regaining its foothold in tech spheres and seems to be meeting some targets with the aid of the US Chips Act.
Investments in AI-based stocks skyrocketed this year as the technologies continue to evolve. Based on Reuters data, the Philadelphia semiconductor index increased by 39% in 2024 and even outstripped the S&P 500, which gained 18.8%.
