Shares in Chinese chipmaker SMIC plummeted nearly 23% in Hong Kong on Monday causing the stock to wipe 31 billion Hong Kong dollars ($4 billion) off its market value.
The US Department of Defence and other US agencies are reportedly considering banning exports to Semiconductor Manufacturing International Corp., according to Reuters and other news outlets. The giant semiconductor manufacturer could be added to the ‘black list’ which the US government considers to be eroding American interests.
Sanctions against SMIC would be the latest move in an ongoing battle between Washington and Beijing over who controls the technologies of the future.
You may remember a little while ago that a similar situation happened with the US and China regarding electronic components. Over the past year, the world’s two largest economies have been locked in a bitter trade battle over the tariff of goods. China and the US imposed tariffs on billions of dollars’ worth of one another’s goods. According to BBC, ‘The US has imposed tariffs on some $250bn (£204.5bn) of Chinese goods, and China has retaliated with tariffs on $110bn of US products.’ This trade war has affected many companies globally and may continue to do so.
According to CNN Business, On Monday, shares in SMIC were hammered both in Hong Kong, where they plunged nearly 23%, and in Shanghai, where they fell more than 11%. SMIC’s Hong Kong-traded shares are still up more than 50% for the year. Shares in TSMC closed down 0.7% in Taiwan. Samsung stock rose 1.6% in Seoul.
