Shares in several Chinese chip companies tumbled by up to 20% on Monday after the US unveiled its toughest curbs yet on Beijing’s tech ambitions.
Chinese companies from semiconductor equipment and materials makers to AI chip developers are bracing for the impact of the new rules announced on Friday, which include curbs on tech exports to China as well as restrictions on “US persons” working for companies—including American, Chinese or foreign—that provide support for China’s homegrown chip development.
Leading domestic chip equipment maker Naura Technology Group closed down 10%, while shares in its compatriot Hwatsing Technology ended the day more than 17% lower, after falling about 20% at one point. Shares in Advanced Micro-Fabrication Equipment (AMEC), another chip tool maker, closed down nearly 20%.
Another big fall came from Anji Microelectronics, the country’s leading provider of chipmaking chemicals, whose shares closed down 20%. Testing equipment provider Hangzhou Changchuan Technology Co. ended the day 20% lower.
The new restrictions mean that US companies must obtain a license to export parts and components that could be used to support “indigenous chipmaking equipment” companies like Naura and AMEC. American equipment makers like Applied Materials and Lam Research must also obtain a license to ship high-end tool to their clients in China, their biggest market globally.
AI chip developer Cambricon Technology ended trading more than 8% lower, while memory chip provider GigaDevice retreated 8.8%.
Under the new restrictions, “US persons”—which includes both American citizens and permanent residents—will have to obtain a license in order to work for any Chinese company developing or producing semiconductors that meet specific criteria. Lawyers told Nikkei Asia that this rule could be particularly disruptive for China’s tech sector, given how many Chinese Americans are working in the country’s chip sector.
The latest rules also restrict foreign suppliers such as Taiwan Semiconductor Manufacturing Co. and Samsung of South Korea from providing advanced chip production support to Chinese chip developers. The Taiwanese and South Korean stock markets were closed on Monday for a holiday.