TOKYO Electron and ASML Holding led a worldwide rally in semiconductor stocks after Reuters reported the Biden administration planned to exempt chip-equipment makers in Japan, the Netherlands and South Korea from upcoming export restrictions.
ASML shares jumped 11 per cent, the biggest intraday gain since March 2020, on the news. In Japan, Tokyo Electron’s stock rose 7.4 per cent, the most since February. Disco, which makes tools that dice silicon, gained 5.8 per cent, and Screen Holdings, which makes machines that clean wafers and chip packaging equipment, climbed 9.2 per cent.
The US plans to invoke the Foreign Direct Product rule to prevent export of products that use any American technology from around the world to about half a dozen Chinese semiconductor manufacturing facilities, Reuters said. But it is excluding allies such as Japan and the Netherlands, home to the the world’s leader in lithography ASML.
Bloomberg News earlier reported on discussions regarding the Foreign Direct Product rule between the US and its allies, triggering a rout in chip gear shares, from ASML to Tokyo Electron. ASML suppliers Lasertec and Screen had also declined.
US policymakers have focused on exports of semiconductor production equipment as a means to rein in China’s technological capabilities in areas such as artificial intelligence and quantum computing.
Exempting companies such as ASML and Tokyo Electron from such a move would mean Chinese manufacturers would be able to manoeuvre around stricter restrictions that might apply to US makers such as Applied Materials, Lam Research and KLA, however.
The US had floated the possibility of using FDPR to officials in Tokyo and the Hague in an effort to push them to expand their own export curbs on chip production equipment. US officials presented the measure as a likely outcome if the countries do not expand their own China curbs to limit companies’ ability to service and repair restricted equipment already in China, people familiar with the matter had said. BLOOMBERG
