The shares of Chinese chip stocks rose on Monday morning after Beijing announced its ban on some purchases of products from U.S. memory chipmaker Micron. China’s Cyberspace Administration has blocked operators of critical information infrastructure in China from buying products from the U.S. chip company, citing serious potential network security issues.
The Effect of the Ban
As a result of the ban, shares of Chinese chipmakers, such as Hua Hong Semiconductor and SMIC, rose by 3.14% and 2.64%, respectively. Other mainland Chinese memory chip producers, including GigaDevice Semiconductor and Ingenic semiconductor, also saw a significant increase in their shares by 3.74% and 8.08%, respectively.
U.S. Response
In response to Beijing’s announcement, U.S. Commerce Secretary Gina Raimondo opposed the restrictions and stated that they had no basis in fact. The Commerce Department aims to engage with the Chinese government to clarify its position and seek further clarity. Raimondo also mentioned that such measures would cause distortions in the memory chip market and stated that the U.S. would engage with its key allies to address Beijing’s actions.
South Korean Chipmakers
The Financial Times reported that the U.S. has urged South Korean chipmakers not to fill the shortfalls in China if Beijing’s ban comes into effect. As a result, shares of South Korean chipmakers, SK Hynix and Samsung Electronics, both rivals of Micron, rose on Monday morning.
China’s ban on Micron products has resulted in a significant rise in the shares of Chinese chipmakers, while South Korean chipmakers continue to benefit from the situation. The U.S. Commerce Department aims to engage with the Chinese government to address the issue and prevent distortions in the memory chip market.
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