The ASML symbol is displayed on a circuit board, along with the flags of the United States and China, in this illustration taken in Brussels, Belgium, on January 4, 2024.
Jonathan Ra | norphoto | Getty Images
Shares of major global semiconductor equipment companies jumped on Thursday after a report that the United States is considering sanctions on the Chinese chip industry that stop short of previous proposals.
ASML It was about 3.6% higher in early trading in Europe. Tokyo Electron It was 6% higher in Japan where it is traded.
Bloomberg reported on Wednesday that Washington is considering further measures to restrict sales of semiconductor equipment and AI-powered memory chips to China, but the new rules may fall short of previous proposals that were deemed more stringent.
The US Commerce Department's Bureau of Industry did not immediately respond to a request for comment on the Bloomberg report.
The United States is now considering adding a smaller number of suppliers to Chinese tech giant Huawei to an export blacklist known as the Entity List. According to the report, one of the major Chinese companies that will not be added is ChangXin Memory Technologies, a memory company and potential competitor to the likes of SK Hynix and Samsung.
Analysts at Jefferies said ASML had previously been on target for its revenues from China to fall by 30% next year. Jefferies said on Thursday that excluding that company could mean ASML's sales in China “will decline less than expected next year.”
ASML has been caught in the crosshairs of the US-China technology battle over semiconductors because of the Dutch company's important position in the chip supply chain.
ASML produces a machine that chipmakers need to manufacture the most advanced semiconductors. These machines have not been exported to China yet due to different export controls. Recently, the Dutch and US governments have imposed restrictions that make it difficult for ASML to export some of its less advanced devices to China.
The company sells its devices to “fabrication factories,” or factories that already manufacture chips, such as those in Taiwan TSMC Besides SMIC In China. Any rules that impact demand or directly target semiconductor manufacturers will have a negative impact on ASML.
The Bloomberg report noted that further sanctions under consideration would target Chinese companies that make semiconductor manufacturing equipment, not factories that actually make chips. This is also a positive for ASML and other foreign semiconductor equipment companies that sell to fabs.
