AI and chip stocks are dropping across the board following a Wall Street Journal report that the U.S. Department of Commerce (DOC) is preparing further restrictions on Samsung, SK Hynix, and Taiwan Semiconductor’s (TSM) access to American chip technology in China.
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The three companies have blanket waivers on shipping U.S. chip-making equipment to their facilities in China, although DOC export controls head Jeffrey Kessler wants to change that. Kessler has informed the companies of the DOC’s intention to cancel the waivers, said people familiar with the situation.
U.S. Doesn’t Seek to Escalate Trade Tensions
White House officials have said that the potential waiver cancellation isn’t meant to escalate trade tensions with China. Instead, its goal is to “mirror licensing requirements that apply to other semiconductor companies that export to China,” said a DOC spokesperson. The policy could strike a chord with China, as the two countries promised to refrain from new export restrictions as part of their trade agreement reached in London earlier this month.
If canceled, the three companies would have to apply for a license each time they ship American chip equipment to their Chinese factories.
A majority of U.S.-listed chip stocks are in the red as investors digest the development.
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