Hong Kong shares of Semiconductor Manufacturing International Corp fell significantly more than 7% on Monday after the United States imposed restrictions on exports to China’s chip maker that is biggest, citing a risk of military use.
SMIC’s shares fell as much as 7.9% to HK$17.12 ($2.21), the cheapest since May 29, and were last down 6.7%. SMIC’s Hong Kong Shares Fall Because U.S. Increased Export Restrictions.
The company said it hadn’t received any official notice of the restrictions and included it’s no ties with the military that is Chinese.
Companies of specific equipment to SMIC will now have to submit an application for specific export licenses, according to a letter from the U.S. Commerce Department dated and seen by Reuters Friday. Hong Kong shares of Semiconductor Manufacturing International Corp.
Earlier this year SMIC raised $6.6 billion in a listing that is secondary Shanghai’s tech-centric STAR market.
The organization said it intended to use the funds to build out capacity that is additional producing advanced chipsets.
SMIC recently started chips that are manufacturing the 14 nanometer process node, about two generations behind the technology used by rival Taiwan Semiconductor Manufacturing Co Ltd.
The restrictions, however, throw a wrench in SMIC’s plans as it relies on gear created by companies hailing through the U.S. or nations that are U.S-allied.
Following news of the restrictions, an op-ed posted on Sunday in the worldwide Times, a tabloid owned by state-backed media socket People’s frequent, called for China to embark on a “long tech march” to counter the U.S.’ high-tech suppression against Asia. These fluctuations reverberate through the Asian markets this week as investors wait to see the outcomes of the U.S. Debates and prepare for the elections to results to ripple across the global landscape. Also, many sanctions that were placed on Asian markets by the U.S. are being closely monitored.