Major computer chip manufacturers like Nvidia and TSMC tried to shake off their slump Thursday after warnings from both President Biden and Republican nominee Donald Trump fueled renewed geopolitical concerns among investors.
A selloff in the chip sector earlier this week occurred after the Biden administration threatened severe restrictions on exports by foreign chipmakers to China, while former President Donald Trump rattled the market by suggesting Taiwan should pay the US to defend against China’s aggression.
Taiwan Semiconductor Manufacturing Company had lost the equivalent of more than $52 billion in market value this week. On Thursday, shares ticked up less than 1% even as the company said it expects third-quarter revenue to surge by as much as 34% on increased demand.
TSMC was among the chip stocks that sold off this week. AFP via Getty Images
US-based Nvidia bounced back 2.8% Thursday after plunging more than 9% since Monday. Japanese chipmaker Tokyo Electron sank 8.8%. Dutch firm ASML’s shares were down less than 1% after declining more than 10% the previous day.
The tech-heavy Nasdaq index plunged 125 points, or 0.7%, on Thursday — on the heels of plummeting more than 500 the previous day. The Dow, meanwhile, tumbled 533 points, or 1.3%, after setting records the previous three sessions.
The Philadelphia Semiconductor Index, which tracks the likes of Nvidia, TSMC and Intel, lost nearly $500 billion in market value on Wednesday alone, according to the FT.
The Biden administration warned allies that it could implement drastic trade restrictions on foreign chipmakers such as Japan’s Tokyo Electron and Netherlands-based ASML if they continue selling advanced chips to China, Bloomberg reported.
The move suggested the Biden administration is stepping up efforts to block China’s access to the advanced chips required to power artificial intelligence amid heightened tensions between Washington and Beijing.
ASML was one of the foreign firms that could be targeted by Biden’s new trade…..