Trump abandons Taiwan? The future of Western semiconductors hangs in the balance

The US has indicated that it is considering tightening trade restrictions if companies continue to grant Beijing access to advanced semiconductor technology. A stance that hurt ASML, a Dutch supplier of chip-making equipment, which fell around 9% following the news, despite the company beating second quarter earnings estimates. Nvidia's stock was also down, losing around 6%. Even heavier (-7.5%) was the thud of Advanced Micro Device (AMD). But the collapse affected all companies in the sector: from Qualcomm to Broadcom, from Micron Technology to Arm. Clearly, TSMC itself also took a nosedive;

The only company to move against the trend was Intel, with the stock gaining up to 5%. And the reasons are absolutely strategic. Indeed, the American manufacturer has been repaid for its efforts to project it towards absolute autonomy. A long-term strategy, that of Intel, which is working to build numerous foundries throughout the western world. Foundries that should allow significant production autonomy, so as to untie the fate of its chips from what happens in Asia. The small contract manufacturer GlobalFoundries also went up by over 13%: a clear sign of distrust in the leader TSMC.

It should be recalled that the Biden administration has moved aggressively in recent months to restrict China's access to cutting-edge chip technology, with broad restrictions enacted in October to limit exports of AI processors designed by companies like Nvidia. The restrictions have dented US chipmakers' sales to China. Nvidia 's Chinese revenue was about 18 per cent of total revenue in the quarter ended 28 April, up from 66 per cent in the previous period.

Now the possibility of new axes, which combined with Trump's words on Taiwan, have sunk the chip sector.