December 5, 2022

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China’s chip sector collapses after new US export rules. Effects on Stm and Technoprobe

Hang Seng Tech is down 4.2% Monday 10 October after it was posted before US Bureau of Industry and Security (BIS) for a document explaining New rules for exporting chips to China that can be used in new supercomputers and in the military.

The Biden administration issued a wide range of export controls on Friday, including a measure to block China from certain semiconductor chips made. Anywhere in the world with American equipment.

The rules state that shipments of a wide range of chips for use in Chinese supercomputing systems That many countries today around the world They use it to develop nuclear weapons and other military technologies. Some industry experts believe that the ban may also affect The commercial data center of Chinese tech giantsThat is why Alibaba and Tencent shares lost between 2.5% and 3% on Monday.

The United States and China, a limitation on technology that takes history back to 1990

The series of measures may represent the largest shift in US policy toward exporting technology to China since the 1990s. According to analysts, if this policy decision is effective, it could hamper the Chinese chip manufacturing industry by forcing US and foreign companies that use US technology to stop supporting some of the major factories and chip designers in China. China International Semiconductor Manufacturing Co. fell 3.8% on Monday, NAURA Technology Group Co shares fell 10%, and Hua Hong Semiconductor Ltd lost 9.5%.

Citi analysts wrote in a statement that US restrictions could make China’s development of advanced chip technologies more difficult, which is expected to see the confirmation of a third term for President Xi Jinping next week.

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The Department of Commerce’s Bureau of Industry and Security (BIS), according to the Biden administration’s official document, “is implementing a series of updates aimed at controlling exports to protect the national security of the United States and foreign policy interests.” This decision “will limit the ability of the People’s Republic of China to procure and manufacture certain high-quality chips used in military applications…”.

The declared export controls “limit China’s ability to acquire advanced computer chips, develop and maintain supercomputers, and produce advanced semiconductors. China uses these elements and capabilities to produce advanced military systems, including weapons of mass destruction, and to improve speed and accuracy.” The military decision, planning and logistics, as well as its independent military systems and the commission of human rights violations,” stated the official text.

Effects on StM and Technoprobe of New US Rules in Technology

In particular, it was forbidden not only to export advanced semiconductors, which were defined as those of Logic family With production nodes less than 16 nm or memories with production nodes less than 18 nm, those are produced in the United States, but also those that are produced in other parts of the world If American machines are used in the production process.

In addition to The restrictions will prohibit any US citizen or company from providing direct or indirect support to Chinese companies engaged in advanced semiconductor production. But the US administration will do that an exceptionAnd the Excludes from the ban on production plants in China owned by US companies or allied countries exporting outside China.

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According to Equita Sim analysts, the implications for StM “Limited because its products relate primarily to analog products on higher production nodes than those indicated while they can have a greater impact technoprop, since the high-quality probe cards are mainly used for tests on chips associated with production nodes lower than those indicated in the provisioning. On Monday, Ftse Mib was down 0.5%, StM lost 1.3% at €33.23 while Technoprobe rose 0.9% to €7.46. (Reserved copies)