Biden's China Chip War Win Impacts These Stocks

The pressure on China's chip makers is set to increase after President Joe Biden secured international support limiting the flow of advanced technologies to the world's second-largest economy. This move is likely to further intensify the competition between China and the United States in the global chip market.
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The semiconductor industry is bracing for a potential slowdown, as some of the biggest names in chips stand to be impacted.
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Japan and the Netherlands have reportedly reached a deal with the United States to restrict the export of advanced chipmaking equipment to China. According to The

Wall Street Journal and other outlets, the deal was reached on Friday and will see the three countries work together to limit China's access to sensitive technology.People familiar with the matter say that the agreement is a major victory for the Trump administration, which has been seeking to limit China's technological advancement.
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The move builds on the White House's efforts to slow the development of critical technologies by China's military with export restrictions on American firms. The latest restrictions follow years of efforts to prevent China from manufacturing cutting-edge semiconductors.
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The latest restrictions on semiconductor manufacturing in China are the latest in a long line of efforts to prevent the country from becoming a leading producer of cutting-edge chips. For years, China has been lagging behind other countries in this area, but with the recent investments and advances in manufacturing technology, it has been closing the gap. These latest restrictions are likely to slow down China's progress in this area, but it is not clear how long they will remain in place.
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Some of the most influential companies in the semiconductor industry are based in Japan and the Netherlands. This is a major win for the United States in limiting China's access to the most advanced chips. These companies have a lot of power and influence in this critical sector of global technology.
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ASML  is a Dutch company that bills itself as "the most important tech company you've never heard of." The company's stock was down 2% in Monday's premarket after it announced that sales growth in 2022 would be 20%. ASML is a major supplier of lithography systems to companies like Taiwan Semiconductor Manufacturing2330+7.95% (TSM) and Samsung Electronics (005930.Korea). The company holds a near monopoly on these machines, which are a critical part of the chip-making process. ASML is also a pioneer in extreme-ultraviolet (EUV) lithography, which is the much-anticipated next generation of the technology.
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The company, which is currently experiencing a sales growth of 20%, is expected to see an even greater demand for its equipment in the coming year.
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The Netherlands will bar ASML from selling some of its most advanced machines to China, the Journal reported. Japan is setting similar restrictions on Nikon Corp. Nikon stock eked out a 0.1% gain on Monday, but underperformed Tokyo’s benchmark Nikkei 225 index. Tokyo Electron is also likely to be impacted, according to the Journal, though shares in the group ended 0.7% higher in Tokyo trading. Shares in Dutch chip designer NXP Semiconductors shed 1.2% in the U.S. premarket.
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The new trade deal with Japan and the Netherlands is a positive development for the Biden administration, but it adds some uncertainty for semiconductor companies hoping to rebound from a tough 2022. The agreement comes ahead of a wave of chip earnings this week, with Advanced Micro Devices (AMD) and NXP Semi reporting results.
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Analysts at Barclays are becoming more optimistic about the outlook for chips in 2023. They noted headwinds for those exposed to semiconductor capital equipment, but said that artificial intelligence trends could boost several companies in the sector.
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Analysts are becoming more positive on semiconductors. Artificial intelligence trends could boost several companies in the sector. This is good news for the industry, as semiconductors are a key component in many electronic devices.