sankai
Qualcomm (NASDAQ:QCOM), Nvidia (NASDAQ:NVDA) and chip equipment makers led semiconductors lower on Monday as the industry deals with new export rules from the U.S. slated to curb the use of advanced chips in Chinese military applications.
San Diego, California-based Qualcomm (QCOM) led decliners, falling nearly 5% while Nvidia (NVDA) and AMD (AMD) dropped 3.7% and 3.1%, respectively. Other players in the space, including Broadcom (AVGO), Microchip (MCHP), ON Semiconductor (ON) and Monolithic Power Systems (MPWR) also declined between 3% and 4.5%.
On Friday, Nvidia (NVDA) told Seeking Alpha that the new export controls from the U.S. government would not have a “material impact” on its business.
Conversely, Micron (MU) and Intel (NASDAQ:INTC) saw more muted losses, with Micron dropping less than 2% and Intel down less than 1.5%.
Investment firm Citi said on Monday that Intel (INTC) and Nvidia (NVDA) were two of the companies with the most to lose following the new rules.
Chip equipment companies also saw considerable declines, with Lam Research (NASDAQ:LRCX) leading the way, down nearly 9%. Applied Materials (AMAT) and KLA Corp. (KLAC) declined 6% and 5%, respectively.
Among the chip equipment suppliers, Citi analyst Vivek Arya said that Lam Research (LRCX) would likely be the most impacted by the new rules.
Foundry stocks also declined, led by a 2.5% decline for Taiwan Semiconductor (TSM) as Taiwan indicated its firms would follow the new U.S rules. GloablFoundries (GFS) fell slightly more than 1.5% in mid-morning trading.
On Friday, the Commerce Department published new rules that said companies seeking verification to sell to China would be faced with a “presumption of denial” standard if they produce DRAM chips below 18 nm, above 128 layers for NAND chips and below 14 nm for logic chips and would have to apply for a license.
Bank of America recently reiterated its buy rating on Nvidia (NVDA) and several other chip makers, as it believes the group will continue to benefit from increased cloud computing spending.
