Chinese chipmaker shares fell sharply on Monday after the United States restricted its access to American technology in a move that could hinder the global rollout of 5G networks. The Trump administration said on Friday it would limit exports of chips and other technology to Fujian Jinhua Integrated Circuit Co Ltd, saying it posed “an unusual and extraordinary threat” to U.S. national security. Fujian Jinhua shares fell 10 percent in morning trade on the Shenzhen stock exchange, while those of bigger peer SMIC were down 5 percent in Hong Kong.
What are the US curbs?
The US curbs are a set of restrictions that the US government has placed on Chinese chipmaker Fujian Jinhua Integrated Circuit Co. The restrictions were put in place in order to prevent the company from acquiring sensitive technology from US firms. The curbs prohibit Fujian Jinhua from buying certain types of equipment and software from US companies. They also bar the company from receiving loans from US financial institutions.
How will this affect Chinese chipmakers?
After the United States imposed restrictions on Chinese chipmaker Fujian Jinhua, shares of other Chinese chipmakers fell in sympathy.
Analysts say that the move will have a negative impact on the entire Chinese semiconductor industry, as it will make it more difficult for companies to obtain the necessary technology and components. This could lead to a slowdown in the sector, which would have ripple effects throughout the Chinese economy.
The situation is being closely watched by international investors, as it could have implications for the ongoing trade dispute between the US and China.
What are the consequences of this development?
The consequences of this development are far-reaching and uncertain. For one, it could upend the global chipmaking industry, which is currently dominated by U.S. firms. Furthermore, it could make it more difficult for American companies to do business in China, and vice versa. The trade war between the U.S. and China has been escalating for some time, and this latest move is likely to further ratchet up tensions.
The future of the semiconductor industry in China
The semiconductor industry in China is facing significant challenges in the wake of US trade restrictions. US chipmakers have been major suppliers to the Chinese market, and the new tariffs are likely to cause disruptions in the supply chain. In addition, Chinese companies are being increasingly scrutinized by the US government for their alleged involvement in intellectual property theft.
These challenges are likely to have a profound impact on the future of the semiconductor industry in China. The Chinese government has already announced plans to invest billions of dollars in domestic semiconductor companies, in an effort to reduce dependence on foreign suppliers. But it will be difficult for Chinese companies to match the technological capabilities of their foreign counterparts. And even if they do, they will still need to contend with the mistrust and hostility of the US government.
