On December 3, 2024, several major Asian chip stocks rose despite the U.S. government imposing new semiconductor export curbs targeting China’s ability to produce advanced chips. These restrictions are part of a broader strategy to limit China’s access to cutting-edge technology that could enhance its military capabilities. Despite these challenges, key semiconductor companies in Taiwan, Japan, and South Korea saw notable share price increases.

Impact on Taiwanese Stocks: Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip supplier, saw its shares increase by 2.4%. This rise highlights the company’s resilience, even as the Biden administration imposed new export restrictions. TSMC’s strategic position in the global chip supply chain continues to make it a key player in the semiconductor industry, unaffected by the restrictions targeting China.

Japanese Chip-Related Stocks: Several Japanese chip-related stocks also experienced significant gains. Tokyo Electron saw an increase of 4.7%, while Lasertec rose by 6.7%. Other companies such as Advantest and Renesas Electronics gained 3.9% and 2.2%, respectively. These companies are major contributors to Japan’s semiconductor sector and are likely to benefit from shifting global demand as restrictions affect Chinese competitors.

Softbank's Performance: Softbank, which owns a significant stake in Arm, a prominent British chip designer, also saw its shares rise by 3.6%. Softbank’s investments in the semiconductor sector have helped it leverage growth in the technology and AI industries, which continue to drive demand for semiconductors globally.

South Korean Stocks Resilient: Despite concerns over the impact of the new U.S. curbs on high-bandwidth memory chips, Samsung Electronics and SK Hynix, the two largest memory chipmakers in South Korea, saw their shares rise by 0.9% and 1.8%, respectively. According to Derrick Irwin, a portfolio manager at Allspring Global Investments, the impact of the curbs on South Korean companies will likely be limited, as their sales of high-bandwidth memory chips to China are relatively small. Moreover, these companies are expected to shift demand to markets like the U.S. and Europe.

Chinese Companies Affected: In contrast, several Chinese semiconductor companies saw a decline in their stock prices due to the new U.S. export controls. Naura Technology Group and ACM Research saw their shares drop by 3% and 1%, respectively, while Piotech managed a modest 1% increase. Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker, fell by 1.5% in Hong Kong. The new restrictions target 140 additional companies, including these major players, further complicating China’s efforts to advance its semiconductor industry.

U.S. Export Controls Explained: The U.S. Department of Commerce announced a new round of export controls, including restrictions on 24 types of manufacturing equipment and three types of software tools used in semiconductor production. These measures are part of the ongoing efforts to limit China’s access to advanced semiconductor technologies. Additionally, the U.S. has introduced a new “red flag guidance” to address compliance concerns and critical regulatory changes to enhance the effectiveness of existing controls.

Conclusion: Despite the U.S. imposition of new export curbs, Asian chip stocks displayed resilience, with notable gains in companies like TSMC, Softbank, and SK Hynix. While the export restrictions could pose challenges for Chinese semiconductor companies, the broader market appears to be adjusting to these changes, with companies outside of China continuing to benefit from the evolving global semiconductor demand.