U.S. Semiconductor Stocks Gain Amid New Trade Probe on Chinese Chips.
U.S. semiconductor stocks edged higher in premarket trading on Tuesday after the Biden administration launched a trade investigation into Chinese-made legacy semiconductors. The investigation, initiated under Section 301 of the Trade Act of 1974, could lead to new tariffs on older chips from China used in everyday products such as cars, washing machines, and telecom equipment.
- Broadcom (NASDAQ:AVGO): +1.8%
- AMD (NASDAQ:AMD): +1.8%
- Marvell (NASDAQ:MRVL) Technology: +0.4%
- Micron (NASDAQ:MU): +0.1%
Meanwhile, sector-tracking ETFs, including the SOXX and SMH, rose 0.3% and 0.2%, respectively. However, Nvidia (NASDAQ:NVDA) and Taiwan Semiconductor experienced slight declines of 0.3% and 0.8%.
The Biden administration initiated the probe to counter China’s state-supported expansion of its chip industry. By offering chips at artificially lower prices, Chinese companies have gained an edge in global markets, posing a challenge to U.S. semiconductor producers.
U.S. Trade Representative Katherine Tai explained that the investigation is designed to safeguard U.S. market competition and prevent China from dominating the global semiconductor market.
The Section 301 investigation could result in additional tariffs on Chinese semiconductors, adding to the existing 50% tariff set to take effect on January 1. These measures aim to reduce reliance on Chinese chips and protect U.S. manufacturing capabilities.
Source: GUARDIANGLOBE
