U.S. reportedly considers toned-down China curbs, leading to a rise in shares of key chip suppliers.

• The global semiconductor equipment firms' shares rose on Thursday following news that the U.S. is considering less severe sanctions on China's chip industry compared to earlier proposals.
• In Europe, ASML was trading around 3.6% higher, while in Japan, Tokyo Electron was up more than 6%.

The global semiconductor equipment firms' shares rose on Thursday following news that the U.S. is considering less severe sanctions on China's chip industry compared to earlier proposals.

In Europe, the stock closed around 2.9% higher in afternoon trade, while in Japan, it traded 6.7% higher.

On Wednesday, Bloomberg reported that Washington is considering imposing additional restrictions on the sale of semiconductor equipment and AI memory chips to China, although the new rules may not be as strict as previously proposed.

The Bureau of Industry of the U.S. Commerce Department refused to provide a comment on the Bloomberg report.

The U.S. is now considering removing ChangXin Memory Technologies from the Entity List, which would allow the Chinese memory company to continue exporting to the U.S.

Analysts at Jefferies stated that ASML had previously predicted a 30% decline in revenue from China next year. However, the exclusion of that company could mean that ASML's sales in China will "decline by less than expected next year," Jefferies said on Thursday.

The chip supply chain has made ASML a target in the technology war between the U.S. and China over semiconductors.

ASML produces machines that chipmakers need to make advanced semiconductors, but these machines have not been exported to China due to export controls. The Dutch and U.S. governments have recently imposed restrictions that make it harder for ASML to export some of its less advanced machines to China.

ASML's sales of machines to "fabs" or plants that manufacture chips, such as those in Taiwan and China, will be negatively affected by any rules that target semiconductor manufacturers directly or impact demand.

The Bloomberg report proposed that future sanctions may focus on Chinese companies producing semiconductor manufacturing equipment, rather than the factories that manufacture the chips themselves. This is beneficial for foreign semiconductor equipment firms, including ASML, which sell to fabs.