• Reuters, SINGAPORE and HONG KONG

Semiconductor stocks in China jumped yesterday after Reuters reported that the United States ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to stop shipments of advanced chips to Chinese customers , which investors say could accelerate Beijing’s self-reliance efforts.

TSMC yesterday began suspending shipments of some sophisticated chips to some Chinese customers after receiving a letter from the U.S. Commerce Department imposing export restrictions on the products, Reuters reported on Sunday, citing an anonymous source.

The United States has imposed export restrictions on TSMC models of 7 nanometers or more advanced, Reuters reported.

Photo: Reuters

Investors believed this would encourage authorities to support Chinese manufacturing and bought shares of local manufacturers, propelling the stock of Semiconductor Manufacturing International Corp (SMIC, 中芯國際) up 4.7 percent to a record high. .

SMIC is China’s largest foundry and the country’s leading alternative to TSMC. It is known for helping Huawei Technologies Co (華為) produce the chips used in its latest smartphones, including the Mate 60 and Pura 70.

The CSI semiconductor index jumped more than 6 percent in trading to a three-year high, while the CSI integrated circuits index rose 5 percent. Information technology stocks rose 4.8 percent to their highest level in two and a half years.

“In the medium to long term, this will force the reorganization of the supply chain, increase demand for domestic production capacity of advanced processes, and promote technological breakthroughs in upstream semiconductor equipment and materials,” the company said Chinese brokerage Cinda Securities Co (信達證券). in a note on Sunday.

Investors have bet that Donald Trump’s re-election as U.S. president could actually benefit strategic sectors in China by benefiting from state support and say China is far better prepared for trade tensions than in 2016.

During trading in Taipei, TSMC recouped most of its initial losses thanks to its strong fundamentals, closing down 0.46% at NT$1,085 after hitting NT$1,070.

TSMC shares were under pressure following the Reuters report, said Tsai Ming-han (蔡明翰), an analyst at Cathay Futures Consultant Co (國泰證期顧問).

“TSMC remains fundamentally healthy, so previous losses provided a good buying opportunity for bargain hunters,” Tsai said, referring to the company’s record sales of NT$314.24 billion last month, in an increase of 29.2% compared to the previous year.

“To my knowledge, TSMC stopped selling chips made using the 7-nanometer process to China before the report surfaced. The report had only a short-lived impact on TSMC’s stock price today,” Tsai said.

Additional reporting from CNA and Editor-in-Chief