Global semiconductor stock decline due to Tension over Taiwan

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    The scheduled trip to Taiwan by U.S. House of Representatives Speaker Nancy Pelosi sparked a fresh escalation in tensions between Washington and Beijing, which contributed to a decline in semiconductor stocks globally on Tuesday.

    China has consistently cautioned against Pelosi’s travel because it sees it as helping the pro-independence movement in Taiwan. Pelosi has been a vocal opponent of Beijing for a long time.

    The largest semiconductor contract manufacturer in the world, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW), as well as rival United Microelectronics Corp (UMC), are both based in Taiwan (2303.TW). The firms’ shares decreased by 2.4 percent and 3 percent, respectively.

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    credit: reuters

    Chinese equities had their worst dip in more than two months, while Taiwanese stocks (.TWII) posted their biggest percentage down in three weeks due to rising geopolitical concerns. U.S. semiconductor stocks declined between 0.7 percent and 1.9 percent, including Nvidia Corp (NVDA.O), Intel Corp (INTC.O), Qualcomm (QCOM.O), and Micron Technology Inc (MU.O).

    Philadelphia SE Semiconductor index (.SOX) decreased by 1.1%.

    In Europe, Infineon (IFXGn.DE) had a 1% loss while Dutch companies ASML (ASML.AS), ASMI (ASMI.AS), and BESI (BESI.AS) saw declines of 2% to 3%. Ahead of Pelosi’s anticipated arrival on Tuesday, Chinese warplanes reportedly buzzed the boundary dividing the Taiwan Strait. A Chinese maker of defence equipment, Xi’an Tian He Defense Technology Co (300397.SZ), saw a 20 percent increase in share price.

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