Global chip stocks fell sharply after reports of tighter export restrictions from the US and comments from Trump, who said Taiwan should pay the US for defense

WATCH NOW — Global chip stocks fell sharply, with ASML, Nvidia and TSMC posting declines amid reports of tighter export restrictions …

CNBC 2024-07-18 Arjun Kharpal

Context & Ripple Effects

This selloff fits an established pattern: US curbs on China had already hit chip shares across Japan, South Korea and Taiwan in 2022, tying semiconductor valuations to policy access as well as demand.

The latest reports extend that sensitivity to key equipment, chip-design and foundry names, while Trump’s comments put Taiwan’s role in the supply chain at the center of the market reaction. A later tariff-driven global chip selloff reinforces how quickly trade-policy risk can spread across the sector.

First-order effects

ASML, Nvidia and TSMC face an immediate valuation reset as investors price the possibility that tighter US export rules could narrow addressable markets or disrupt existing sales channels.
Taiwan-linked supply-chain exposure becomes a more prominent risk factor for TSMC and its customers following Trump’s defense-payment comments.

Second-order effects

Chip buyers and suppliers may reassess product allocation and procurement plans if export restrictions move from reports to policy, amplifying uncertainty beyond the directly named companies.
Competitors with less exposure to restricted export routes could gain relative attention, while the sector’s pricing increasingly reflects geopolitical risk alongside earnings expectations.

Third-order effects

If repeated policy shocks persist, semiconductor companies may be valued less as a single global cycle and more as regionally constrained supply networks, with access to markets and manufacturing locations becoming strategic differentiators.
The pattern points toward a more contracted semiconductor cycle: export controls and Taiwan-related political risk can reshape investment decisions even before a formal rule change is implemented.

The trend: Semiconductors are becoming a geopolitical asset class, where trade controls and supply-chain location increasingly move valuations alongside technology demand.

Discussion

@melissakchan Melissa Chan on x
Trump whinges about Taiwan, and top tech stocks — which are on US stock exchanges — fall. A company like NVIDIA alone is the reason for why the S&P 500 has been doing so well — and why 401(k)s (retirement accounts) have grown. I see we're back to stupid again.
@christinelu @christinelu on x
Before all the Trump bros in my feed start repeating random sound bites about Taiwan's need to pay for its defense, a reminder that Taiwan does pay for its defense and it's still waiting on almost $20 billion in US-made weapons to defend itself. Know the difference between [image…
@davidfrum David Frum on x
The Trump message on foreign policy: “We will abandon Ukraine. We will auction Taiwan to the highest bidder. (Checks made out to Trump's personal account, please). We despise our NATO allies and want to be rid of them. But you can totally trust us to keep faith with Israel.”
@nthusharon @nthusharon on x
Taiwan didn't “take” chip manufacturing, Americans found it more profitable to outsource the tedious labor that your own workers didn't want to do, and Taiwanese OPTIMIZED it. In the beginning the US didn't even want to invest in TSMC. Read a book, Mr Trump
@buccocapital @buccocapital on x
Trump suggesting he'll shake down Taiwan for defense protection is a hilarious reminder to market participants who have memory-holed the market volatility and uncertainty that comes with a Trump presidency
@christinelu @christinelu on x
“Taiwan took our chip business from us so that's why we should let an authoritarian country control all the world's chips.” Take that Taiwan. 🙄 [image]
@drewpavlou Drew Pavlou on x
Bloomberg: Would you defend Taiwan against China? Trump: No. [image]
r/politics r on reddit
Global chip stocks from Nvidia to ASML fall on geopolitics, Trump comments
@marypcbuk.bsky.social Mary Branscombe on bluesky
Imagine what an actual trump presidency would do when this is just him spit balling [embedded post]
@kobeissiletter @kobeissiletter on x
JUST IN: The Nasdaq officially posts its worst day since December 2022, falling nearly 3%. The S&P 500 erased ~$650 billion of market cap today. [image]
@valueinvestjpn Francisco on x
Tokyo Electron 8035 really 22% down in two days due to ASML domino effect after weaker prospects PE under 40 For the first time in many months. Very interesting development and I dodged a bullet on this one. [image]
@eugeneng_vcap Eugene Ng on x
A reflection from reviewing ASML's 2Q24 earnings: The stock price was down -12.7% overnight. I reviewed their earnings and the transcripts, and remain confident for stronger H2, and confident of FY2025, and through to FY2030. Market seems more focused on the short-term H1
@jasongoepfert Jason Goepfert on x
The Nasdaq Composite closed down more than -2% on a day the Dow Industrials jumped to a new high. Since the Comp's inception in 1971, that's happened only twice. Apr 14, 1999 Jul 20, 2023 It fell more than -5% within the next month both times. [image]
@rihardjarc Rihard Jarc on x
$META is down a casual 10% in the last 7 trading days. Since we are 2 weeks away from earnings, I don't mind lowered expectations going into a print. In the end, fundamentals tell the story, not the price.
@edludlow Ed Ludlow on x
Intel $INTC is up 5% in premarket after the Bloomberg report that the Biden administration is considering using the FDPR rule to restrict China access to advanced semiconductor manufacturing tech + Trump interview comments on Taiwan (adds Taiwan info) [image]
@lithos_graphein @lithos_graphein on x
Tied to ASML at the hip. No other track tool supports the same level of quality for a lithographic process. Great time to buy Tokyo Electron.
@edludlow Ed Ludlow on x
Northland Capital Markets has a note out — quoted on @Investingcom — saying that Intel is the “only alternative” to TSMC and that they see 100% upside potential. https://www.investing.com/...
@travishoium Travis Hoium on x
$ASML may be an incredibly important company, but paying 15x sales for a hardware stock is nuts. The AI-everything-all-the-time bubble is popping.
@mcaruso_cabrera Michelle Caruso-Cabrera on x
Today was the first time the Nasdaq Composite closed down by more than 2.5% (-2.77%) while the Dow Jones Industrial Average closed with a gain since May 29, 2001. Thanks to @CNBC data team member Nick Wells.@wellsangels [image]
@morningbrew @morningbrew on x
It's a *brutal* day to be a chip stock Micron -4.4% Nvidia -5.4% Broadcom -5.5% TSMC -5.6% Qualcomm -6.4% AMD -7.4% ASML -10.8%

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