AI chip makers received positive news as major semiconductor manufacturers saw significant gains in their stocks following reports that the U.S. is considering less stringent restrictions on technology exports to China.
The latest news out of the rapidly developing Donald Trump administration was well received, as evidenced by the consequent rise in the stock valuation of chip makers. It also provided a boost for a global AI chip market that was thrown into a frenzy as stakeholders frantically looked for creative ways to navigate the complex landscape of trade and geopolitical regulations.
According to reports, ChangXin Memory Technologies (CXMT), which is at the forefront of AI chip innovation in China could benefit from these less stringent sanctions. The knock-on effect could be positive for China’s AI ambitions.
U.S. to ease trade restrictions on technology exports to China
The semiconductor industry powers major modern technology, like artificial intelligence, cloud computing, and 5G, and it has become a focal point in global trade policies.
The U.S. government has placed trade restrictions on China and maintains an export blacklist called the Entity List, which is the focal point of the U.S.-China trade tensions. Names on the list include Huawei. China has stated that these restrictions are politically motivated and harmful to global trade.
New reports suggest that the U.S. is now easing up on these policies. The reports also suggest ChangXin Memory Technologies (CXMT) may be among the firms free from the trade restrictions. This move could help lessen the trade tensions between the U.S. and China. It could also signal that the U.S. is willing to minimize global economic collateral damage while taking a balanced approach to national security.
The easing of restrictions comes as global demand for semiconductors remains strong, riding on the boom in the AI market.
Global AI chipmaker market reactions
European chip makers lead the rally, with ASML seeing a 4% rise in its stock price. The semiconductor company, which has a monopoly over the most advanced lithography equipment used to build AI chips, had previously expected to lose about 20% in revenue due to restrictions on exports to China.
BE Semiconductor Industries and ASM International were also standout performers on the European STOXX 600 index, increasing 5% and 2.9%, respectively.
The Asian Markets are also responding positively to the news, especially Japanese semiconductor companies. Tokyo Electron Ltd. and SCREEN Holdings Co. stocks rose by 4.7% and 3.9%, respectively, while Kokusai Electric Corp. surged by around 23%.
U.S. markets are closed for the Thanksgiving holiday. However, futures for major indices indicate slight gains, which reflect the expectations that chip makers like Applied Materials and Teradyne could see price jumps in their stocks.
If the U.S. displays more leniency on trade restrictions, these companies could benefit from re-opening additional revenue streams from the Chinese market.
Despite the recent development, the broader outlook remains uncertain. Industry analysts say the ease in restrictions is positive. However, the geopolitical landscape remains volatile.
U.S. President-elect Donald Trump has named Jamieson Greer, an advocate for strategically decoupling the U.S. from China, as his trade envoy. This could mean more stringent policies in the near future.
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