HK Stock Market Move | Chip stocks fell further in the afternoon, with TSMC possibly halting the supply of 7nm chips. Institutions say that in the long term, this will promote domestic semiconductor alternatives.

Chip stocks fell further in the afternoon, as of the time of writing, CONTEL (01912) fell by 7.91% to 0.128 Hong Kong dollars; SHANGHAI FUDAN (01385) fell by 6.72% to 16.1 Hong Kong dollars; Semiconductor Manufacturing International Corporation (00981) fell by 6.44% to 27.6 Hong Kong dollars; HUA HONG SEMI (01347) fell by 4.89% to 23.35 Hong Kong dollars. On the news front, according to media reports, the U.S. Department of Commerce has sent a letter to TSMC, requesting them to stop supplying 7-nanometer and more advanced AI chips to mainland Chinese customers starting from the 11th. Sources said that TSMC has informed the affected customers that chip shipments will be suspended from the 11th. There are also reports indicating that the latest control measures only apply to AI/GPU related chips, and chips used in phones, cars, and communication are not affected. Huatai pointed out that Trump emphasized in the election that chip subsidies are not a good method, and proposed imposing a 60% tariff on China, while other countries would face a 10-20% tariff, in order to force TSMC and other overseas companies to move to the U.S. The bank noted that if chip subsidies are suspended, it will have the greatest impact on Intel, which is currently experiencing losses; further restrictions on semiconductor exports may have a short-term impact on the Chinese semiconductor industry, potentially promoting domestic alternatives in the long run; however, U.S. tariffs on other countries could also impact the effectiveness of the "Three Country Control Alliance."