(Bloomberg) -- Chip-related stocks in Japan and South Korea slumped as traders returning from Monday’s holiday reacted to the Biden administration’s move to put fresh curbs on China’s access to US’ semiconductor technology.
Samsung Electronics Co. slid as much as 3.9%, the most in a year, after the Philadelphia Stock Exchange Semiconductor Index sank 3.5% to close at its lowest level since November 2020. The US announced the export curbs on Friday, adding complications for an industry that has had a disappointing start to the earnings season amid slumping demand, and escalating Sino-American tensions.
In other key moves, SK Hynix Inc. slid as much as 3.5%, while Tokyo Electron Ltd. lost as much as 5.3%.
The latest restrictions add to a growing list of challenges facing global technology shares that include a hawkish Federal Reserve, tensions across the Taiwan Strait and ongoing supply-chain issues. Chinese state media and officials over the weekend responded to Biden’s move, warning of economic consequences and stirring speculation about potential retaliation.
“The new rules may increase some of the headwinds around China businesses in two areas: restrictions on a broader group of supercomputer chips, and restrictions on multinational capital investment in China,” Jefferies Financial Group Inc. analysts including Nick Cheng wrote in a note.
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