U.S. trade curb consideration negatively impacts Asia chip stocks.

U.S. trade curb consideration negatively impacts Asia chip stocks.
U.S. trade curb consideration negatively impacts Asia chip stocks.
  • During trading hours, the world's largest chip supplier, Taiwan Semiconductor Manufacturing Company, experienced a decline of up to 4.3% in its share price.
  • Wealth Enhancement Group's senior portfolio manager, Ayako Yoshioka, stated that long-term investors still have buying opportunities.
  • The Biden administration may consider restricting companies from exporting their critical chipmaking technology to China, potentially intensifying the conflict between the two nations.

On Thursday, the price of chip stocks in Asia decreased due to a decline in technology shares on Wall Street and news about possible stricter export controls in the US.

The world's largest chip supplier experienced a 4.3% decline in shares in Asia trade, but later recovered some of the losses. On Thursday, the company announced that its revenue and profit expectations for the second quarter exceeded expectations.

Japanese machinery companies and Taiwan Semiconductor Manufacturing Company's (TSMC) suppliers experienced a decline, with the former slumping almost 9% and the latter falling more than 8%.

Lithography materials provider and industrial water company also dropped by 4.53% and 3.13% respectively.

The Biden administration may consider restricting companies from exporting their critical chipmaking technology to China, potentially intensifying the conflict between the two nations.

Wealth Enhancement Group's senior portfolio manager, Ayako Yoshioka, stated that chip companies have been market favorites due to digitization in various aspects of our lives. Any trade restrictions will affect these companies globally, as seen across the world.

Nearly 2%, 5%, and 10% respectively, South Korean chip stocks slid, tumbled, and plunged.

Asian chipmakers under pressure after Trump says Taiwan should pay the U.S. for defense

But Yoshioka said buying opportunities still remain for long-term investors.

"The market is highly influenced by sentiment and headlines in the short term, but in the long term, the true potential of [artificial intelligence] should be the main focus, as it has the ability to greatly benefit businesses and consumers," she said on CNBC's "Street Signs Asia."

Yoshioka stated that policy hurdles and high earnings expectations can create negative pressure on some stocks in the short term.

The FDPR enables the U.S. to impose restrictions on foreign-manufactured goods, even if they incorporate minimal American technology, thereby impeding non-American businesses.

Large declines on Wall Street from ASML and Nvidia led to a spillover effect on Asian tech stocks, resulting in losses of 12% and 7% respectively.

Despite reporting better-than-expected second quarter earnings, the company that produces the world's most advanced chips closed more than 12% lower.

The stock prices of AMD, Marvell, Qualcomm, and Broadcom dropped more than 7% at the end of trading.

On Wednesday, Donald Trump, the U.S. Republican presidential candidate, stated in an interview with Bloomberg Businessweek that Taiwan should compensate the U.S. for its defense. Additionally, he accused Taiwan of taking "nearly 100%" of America's semiconductor industry.

— CNBC's Arjun Kharpal contributed to this report.

by Charmaine Jacob

Technology