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SMIC’s Hong Kong Shares Fall Because U.S. Increased Export Restrictions

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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.

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Justin N. Richards

Justin N. Richards is a Florida-based technical analyst, market researcher, educator, and trader. Justin began his career in Chicago in 2001 performing futures market analysis for floor traders at the Chicago Board of Trade and the Chicago Mercantile Exchange. He also worked for numerous brokerage firms during that time, all of which hold him in high regard, and he has been providing outstanding analysis services for traders worldwide ever since. Mr. Richards is an expert in the area of market patterns, price and time analysis as it applies to futures, Forex, and stocks. In addition to these talents, he provides educational services for investors looking to improve their analysis and trade skills. Justin has a B.A. in Business Administration from UCLA and an M.S. in Financial Markets and Trading from the Illinois Institute of Technology. Justin’s professional experience, education, and discipline, not only make him an exceptional analyst, they point him out as a reliable, hard working and intelligent business strategist who is dedicated to his craft.
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