TI and Intel Shares Sink as China Tariffs Hit US-Made Chips

Shares of chipmakers with US manufacturing plants fell Friday after China announced new tariffs, targeting semiconductor imports.

Beijing will raise tariffs on all US goods from 84% to 125%, and the China Semiconductor Industry Association issued an emergency notice, which stated that customs determines the origin of imports by where chips are manufactured, not the home country of origin.

The news put particular pressure on Texas Instruments Inc. and Intel Corp., which have semiconductor plants located in the US. TI shares fell 6.8%, while Intel sank 3.7% and GlobalFoundries Inc. dropped 2.4%.

“This is an incredibly uncertain time for chipmakers, and this is certainly not going to help,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services. “Anything that hurts semis more than they’ve already been hit is bad for the general market,” he said.

Analog Devices Inc. and Microchip Technology Inc. are also trading lower, along with Skyworks Solutions Inc. and Qorvo Inc., with the latter two notable suppliers to Apple Inc.

Baird analyst Tristan Gerra wrote that TI shares were “over-reacting” to the news, adding that “while TI’s share in China could erode somewhat, TI benefits from product performance, product breadth, cost structure, and customer service advantages which would be difficult for Chinese OEMs to ignore all together,” a reference to original equipment manufacturers.

The tariffs exclude companies that design chips but don’t manufacture them in the US, resulting in shares of some chipmakers to outperform on the day. Nvidia Corp. gained 2.2%, while US-listed shares of Taiwan Semiconductor Manufacturing Co. rose 3.3%.

The tariffs will likely be “very good” for TSMC, and also act as a positive for Qualcomm Inc. and Advanced Micro Devices Inc., said Jordan Klein, a tech-sector specialist at Mizuho Securities.

“All my feedback suggests US-China trade deal is ALL THAT MATTERS RIGHT NOW for semi stocks and equity markets recovering,” Klein wrote in a note, with the emphasis included. “Very few I speak with believe a China deal will be struck anytime soon.”

He sees positioning in semis as “very light” given the uncertainty.

This article was generated from an automated news agency feed without modifications to text.