The US embargo on advanced semiconductor technology against China and the expansion of the semiconductor technology base have affected China.
Shares in China’s top chipmakers lost $7.7 billion in market value on October 10 as new US export controls came into effect restricting sales of semiconductors made with US technology.
The controls also prohibited US citizens or companies from working with Chinese chipmakers and restricted the export of manufacturing tools.
The US’s landmark $52 billion federal program to increase domestic chip manufacturing capacity bans companies from receiving federal funding for materially expanding production of chips further than 28nm in China for 10 years vying for funding cannot increase theirs Production of advanced chips in China.
Leading US technology ETFs SPDR Select Sector Fund – Technology XLK, VanEck Semiconductor ETF SMHand meShares Semiconductor ETF SOXX have increased between 17.6% and 25.5% since the beginning of the year.
SMH and SOXX with exposure to Nvidia Corp NVDA, Taiwan Semiconductor Manufacturing Company Ltd TSM, Advanced Micro Devices, Inc AMD, ASML Holding NV ASML, Texas Instruments Inc TXN, Intel Corp INTC and other chipmakers led gains.
XLK is exposed to a significant extent microsoft corp MSFT, apple inc AAPLfollowed by chip makers Nvidia and more.
In contrast, the top Chinese tech ETF is recovering behind its US peers. IEquities China Large Cap ETF FXIKraneShares Trust the KraneShares CSI China Internet ETF KWEBand meEquities MSCI China ETF MCHI gained between 0.4% and 2.7% YTD.
The Chinese ETFs have significant exposure to Tencent Holding Ltd TCEHY, Alibaba Group Holding Limited BABA, Baidu, Inc BIDU, JD.Com, Inc JDand more.
Other factors, like China’s crackdown on technology, also impacted big players like Alibaba, JD, and Baidu.
Photo by Tatiana Popova and rawf8 via Shutterstock
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