© Reuters
Investing.com – Asian chipmakers rose sharply on Tuesday after a report indicated that manufacturers in South Korea and Taiwan will be allowed to maintain infrastructure in China despite US sanctions against the country.
Taiwan’s TSMC (TW:) jumped more than 3%, while South Korea’s Samsung Electronics Co Ltd (KS:) and SK Hynix Corporation (KS:) rose 1.6% and 3.7%, respectively, after The Wall Street Journal reported that the three companies would be allowed to maintain and modernize China’s chipmaking infrastructure.
The three companies, which are some of the world’s largest chipmakers, were initially granted a one-year waiver to maintain their Chinese infrastructure after the United States introduced export controls designed to limit Beijing’s access to the latest chip equipment.
But the Wall Street Journal report said that waiver has been extended indefinitely. All three companies have chip manufacturing centers in the country, relying heavily on it as a market and as a supply chain hub.
News of the extended waiver assuaged some concerns about widespread disruption to the chipmaking industry due to US export controls, which were introduced in late 2022. China criticized the move, and also retaliated by blocking domestic sales of US chipmaker Micron (NASDAQ:) at the time. earlier this year.
Other chipmaking stocks also advanced Tuesday, with Japanese semiconductor testing equipment maker Advantest Corp (TYO:TYO) adding more than 5%.
Shares of the chip industry have been on a sharp rise in recent weeks, as a consensus beat from Nvidia (NASDAQ:) prompted widespread bets that an explosion in AI development would drive demand for chips this year.
The positive outlook from Nvidia has largely offset weak chip demand from major Asian suppliers, who have warned that worsening economic conditions in 2023 will dampen technology investment.
But AI can offset this trend, especially with the growing popularity of generative AI tools like OpenAI’s ChatGPT. Artificial intelligence programs require huge amounts of computing power to maintain, hence the demand for fuel chips.
