Companies, such as ASML, the chipmaking equipment provider, continue to sell into China and the US has now told allies that it is considering using the most severe trade curbs available if companies continue giving Beijing access to advanced semiconductor technology.
Intel and GlobalFoundries saw their share valuations jump, however, and this was attributed to the fact that they are investing in new plant in the US.
The Biden administration has certainly taken a more aggressive stance in recent months as it looks to curb Chinese access to cutting-edge chip technology and imposed tough restrictions last year with the intention of limiting exports of AI processors.
Consequently, companies like Nvidia and AMD have seen their sales to China fall and China now accounts for a significantly smaller share of their overall sales.
The sector is not only assessing President Biden’s possible imposition of trade curbs but is also digesting former President Trump’s comments concerning Taiwan.
In an interview with Bloomberg the Republican presidential nominee suggested that he might not be inclined to defend Taiwan against future Chinese aggression, due to Taiwan not giving the US anything for its defence.
Perhaps someone should have a word with Trump. While pointing out that Taiwan plays a central role in the global chip supply chain and should the island ever be invaded it could end up shattering the global economy, perhaps they could also suggest that what the world economy really needs, after a traumatic few years, is a period of stability.
While new manufacturing facilities are being built across the US, Europe and Japan, it will take a number of years for industry's reliance on Asia, and in particular Taiwan, when it comes to semiconductors to start to subside.