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☆ Globally critical chip firm tells U.S. staff to stop servicing China customers after Biden export curbs
▼ + stars: | 2022-10-13 | by ( Arjun Kharpal | ) www.cnbc.com time to read: +3 min

Dutch firm ASML makes one of the most important pieces of machinery required to manufacture the most advanced chips in the world. U.S. chip curbs have left companies, including ASML, scrambling to figure out what the rules mean in practice. A fab is a another name for a chip manufacturing plant. Last week, the U.S. government enacted sweeping rules that aimed to cut off China from key chips and semiconductor manufacturing equipment. Washington is concerned in particular about China obtaining access for the most advanced chips that can be used in military applications, artificial intelligence or super computing.

☆ Analysis: China faces its "Sputnik" moment as US export curbs deal a blow to its chip ambitions
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: +6 min

The measures are set to undermine China's efforts to develop its own chip industry aimed at reducing its reliance on foreign-made chips. These are the questions," says Marco Mezger, a consultant in Taiwan who tracks the global memory chip sector. Washington is also scrambling to tackle unintended consequences of its new export curbs, people familiar with the matter said. Hours before the new restriction took effect, South Korea's SK Hynix (000660.KS) said it got U.S. authorization to receive goods for its chip production facilities in China without additional licensing imposed by the new rules. Yet business at toolmaking firms servicing Chinese customers has already slowed dramatically, leaving their staff with little work to do but creating an opening for Chinese equipment makers seeking to catch up with western rivals, sources said.

☆ Applied Materials cuts quarterly revenue estimate on new China export curbs
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +1 min

Oct 12 (Reuters) - Semiconductor manufacturing equipment maker Applied Materials Inc (AMAT.O) said on Wednesday new export curbs related to China's chip industry may result in a revenue hit of over $1 billion in the fourth and first quarters. Under the new regulations, U.S. companies must cease supplying Chinese chipmakers with equipment that can produce relatively advanced chips unless they first obtain a license. Applied Materials now expects fourth-quarter net sales to be about $6.4 billion, plus or minus $250 million, compared with prior outlook of $6.65 billion, plus or minus $400 million. The company also expects the new regulations to impact net sales in the first quarter of fiscal 2023 similar to the current quarter. Register now for FREE unlimited access to Reuters.com RegisterReporting by Arunima Kumar in Bengaluru; Editing by Krishna Chandra EluriOur Standards: The Thomson Reuters Trust Principles.

☆ Chip Companies in for a Brisk Fall
▼ + stars: | 2022-10-12 | by ( Dan Gallagher | ) www.wsj.com time to read: +1 min

Coming earnings reports from such companies as Taiwan Semiconductor Manufacturing are unlikely to turn around the current negative sentiment for the semiconductor industry. The semiconductor industry is well accustomed to downdrafts. The third-quarter earnings season for the chip industry is shaping up to be a harsh one. Chip makers Samsung and Advanced Micro Devices already preannounced disappointing results for the quarter late last week. On top of that all, the U.S. government is cracking down even harder on semiconductor technology sold to Chinese companies, with new rules announced Friday that expand on previous export controls.

And as of midnight Tuesday, vendors also cannot support, service and send non-U.S. supplies to the China-based factories without licenses if U.S. companies or people are involved. The company said the change would help avoid disruptions to the supply chain and that the authorization is for a year. Licenses for Chinese chip factories were likely to be denied. Taiwan Semiconductor Manufacturing Co.(2330.TW) and Intel Corp (INTC.O) also operate chip factories in China. The Chinese chip facilities are not expected to get any reprieve.

☆ Socionext defies chip slump with Japan's biggest IPO this year
▼ + stars: | 2022-10-12 | by ( Sam Byford | ) www.reuters.com time to read: +3 min

TOKYO, Oct 12 (Reuters) - Making its market debut on Wednesday, Japan's Socionext Inc (6526.T) bucked softening sentiment toward chips by surging 15% in Tokyo's biggest initial public offering of the year so far. The total deal size was 76.8 billion yen ($525 million), including an overallotment of 2.74 million shares. Based in Yokohama, Socionext was formed in 2015 out of a merger between chipmaking units at Fujitsu Ltd (6702.T) and Panasonic Holdings Corp (6752.T). Socionext says it designs SoCs for clients including major automakers and 5G vendors. But Chu said Socionext was coming in at a "wide discount" to international peers.

☆ Intel plans to cut thousands of jobs hit by PC slowdown - Bloomberg News
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +1 min

The company had 113,700 employees as of July, Bloomberg News said. Register now for FREE unlimited access to Reuters.com RegisterIntel declined to comment on the job cuts. The company in July slashed its annual sales and profit forecasts after missing estimates for second-quarter results. Intel's Chief Executive Officer Pat Gelsinger released a memo to company employees on Tuesday outlining plans to create an internal foundry model for external customers and the company's product lines. read moreRegister now for FREE unlimited access to Reuters.com RegisterReporting by Yuvraj Malik and Abinaya Vijayaraghavan in Bengaluru; Editing by Shounak DasguptaOur Standards: The Thomson Reuters Trust Principles.

☆ If Taiwan is safe, chip supply chains will be secure, says Taiwan minister
▼ + stars: | 2022-10-11 | by ( David Shepardson | David Brunnstrom | ) www.reuters.com time to read: +2 min

WASHINGTON (Reuters) -Taiwanese Minister for Economic Affairs Wang Mei-Hua said on a visit to the United States on Tuesday that if Taiwan remains safe, global supply chains of vital semiconductors would also be secure. She said Taiwan is keen for more cooperation between Taiwan and the United States to ensure resilient supply chains. “If Taiwan is safe, the global supply chain will also be secure. Asked whether Taiwan was concerned that U.S. government subsidies to encourage reshoring of chip manufacturing could lessen U.S. reliance on Taiwan, she said the Taiwanese semiconductor supply chain was “very, very concrete” having been built up over more than 40 years. “We have a very huge supply chain in Taiwan, that is difficult to duplicate, or difficult to replace.” she said.

☆ Chip Companies in for a Rough Fall
▼ + stars: | 2022-10-11 | by ( Dan Gallagher | ) www.wsj.com time to read: +1 min

☆ World stocks head back towards 2-year lows as mood sours
▼ + stars: | 2022-10-11 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

There was a modest respite for Britain's battered bond market after the Bank of England said it would start purchasing inflation-linked debt. And MSCI's world stock index was down 0.5% -- moving back towards roughly two-year lows hit last week (.MIWD00000PUS). Emerging market stocks hit their lowest level since April 2020 and are on track for a near-30% tumble year-to-date, its worst year since the 2008 global financial crisis. GILT RESPITEBritish government bond or gilt yields edged lower, having soared on Monday, following the BoE's latest efforts to shore up the battered bond market. The Aussie dollar fell to a 2-1/2-year low of around $0.6248 and the kiwi dollar hit a low of $0.5536.

Shares of Asia’s largest semiconductor makers and suppliers declined Tuesday as investors expressed fear about broad ramifications on the sector from new U.S. restrictions on exporting chips and related equipment to China. Taiwan Semiconductor Manufacturing Co., the world’s biggest contract chip maker, dropped 8.3% to its lowest closing in more than two years. TSMC has chip fabrication facilities—or fabs—in China, including in the eastern city of Nanjing.

☆ What Cramer is watching Tuesday — chip troubles, Apple estimate raises, Disney price target cut
▼ + stars: | 2022-10-11 | by ( Jim Cramer | ) www.cnbc.com time to read: +4 min

KeyBanc keeps overweight (buy) rating and $185-per-share price target. Barclays raises Apple hardware revenue estimate, driven by a "slight iPhone upside and much better MacBooks," offsetting weakness in services; lowers price target to $155 per share from $169 but keeps equal weight (hold) rating. Wedbush starts beer, wine and spirits company Constellation Brands (STZ) with an outperform (buy) rating and a $275-per-share price target. Chemical company Westlake (WLK) price-target cut to $105 per share from $112 at Barclays, which keeps neutral (hold) rating. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.

HONG KONG, Oct 11 (Reuters Breakingviews) - Washington's sweeping technology curbs on China today will have ripple effects across global supply chains tomorrow. But the ban may prompt Chinese chipmakers to hasten their progress in the commoditised parts of the market, embedding firms like Semiconductor Manufacturing International (0981.HK) in global supply chains. The measures mark a huge escalation in President Joe Biden's efforts to hobble Beijing's chip advances. Essentially, any company that uses American equipment will be restricted from selling relatively high-tech semiconductors or tools to Chinese firms. And because nearly every factory relies on crucial hardware and software from U.S. suppliers like Lam Research (LRCX.O) and Applied Materials (AMAT.O), the latest move potentially sets back Chinese chipmakers by years, if not decades.

☆ Exclusive: KLA to stop sales and service to China to comply with U.S. export curbs
▼ + stars: | 2022-10-11 | by ( Josh Horwitz | ) www.reuters.com time to read: +4 min

The move underscores huge business headwinds facing chipmakers and chip equipment makers around the world, as the Biden administration published a sweeping set of export controls on Friday aimed at slowing China's progress in advanced chip manufacturing. The source added that the company would also cease supplying China chip plants owned by Intel (INTC.O) and SK Hynix, the world's second-largest memory chipmaker. SK Hynix reiterated its stance that it would seek a license under new U.S. export control rules for equipment to keep operating its factories in China. Another source at an overseas chip equipment company told Reuters that all of the major suppliers to fabs were working round-the-clock to assess the long-term impact of the regulations. Shares in KLA tumbled nearly 5% on Monday, hit by the latest U.S. export control measures.

☆ Here are Tuesday's biggest analyst calls: Meta, Apple, Walmart, Netflix, Coca-Cola, Roblox & more
▼ + stars: | 2022-10-11 | by ( Michael Bloom | ) www.cnbc.com time to read: +9 min

Here are Tuesday's biggest calls on Wall Street: Morgan Stanley reiterates Walmart as overweight Morgan Stanley said that Walmart+ could be worth $45 billion. Morgan Stanley upgrades Amgen to overweight from equal weight Morgan Stanley said the biopharma company is a defensive stock. Morgan Stanley reiterates Microsoft as overweight Morgan Stanley said Microsoft has an attractive valuation. Morgan Stanley downgrades Zoom to equal weight from overweight Morgan Stanley said there's a lack of near term catalysts for the stock. Morgan Stanley names Taiwan Semiconductor as a catalyst driven idea Morgan Stanley said it's bullish heading into semiconductor company's analyst meeting on Thursday.

☆ U.S. Goes Full-Court Press on China’s Chip Sector
▼ + stars: | 2022-10-10 | by ( Jacky Wong | ) www.wsj.com time to read: 1 min

The U.S. has drastically dialed up its chip-sector curbs on China. That will severely curtail China’s ambitions of developing its own cutting-edge semiconductor industry—while hurting U.S. companies selling chips or semiconductor equipment to the country. The Biden administration on Friday imposed some of its broadest restrictions yet on semiconductor sector exports to China. Instead of just targeting specific companies such as Huawei, the new restrictions will require U.S. companies to secure licenses to export certain chips used in artificial intelligence and supercomputing, as well as equipment used in advanced semiconductor manufacturing.

☆ Chinese regulator gives greenlight to fund targeting Korean chipmakers
▼ + stars: | 2022-10-10 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI, Oct 10 (Reuters) - China's securities regulator has given the greenlight to the country's first mutual fund targeting top Chinese and South Korean chipmakers, an official at Huatai-PineBridge Fund Management Co said, amid an escalating Sino-U.S. tech war. The China Securities Regulatory Commission's approval comes amid heightened geopolitical tensions between the world's two largest economies. The exchange-traded fund (ETF) will invest in top Korean semiconductor firms including Samsung Electronics Co (005930.KS) and SK Hynix Inc (000660.KS), as well as Chinese chipmaking giants such as Semiconductor Manufacturing International Corp and Montage Technology Co (688008.SS). In 2021, South Korea was China's second-biggest exporting country in equipments, including chipmaking tools, and Chinese exports to South Korea have also been rising, the fund manager said. South Korea said on Saturday there would be no significant disruption to equipment supply for Samsung and SK Hynix's existing chip production in China from the U.S. move.

☆ Chinese chip stocks tumble after U.S. calls for new curbs on high-end tech
▼ + stars: | 2022-10-10 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +3 min

Future Publishing | Future Publishing | Getty ImagesBEIJING — Chinese chip stocks fell Monday after the U.S. announced new export controls aimed at limiting Beijing's ability to produce advanced military systems. The rules, effective this month, expand on prior U.S. attempts to crimp Chinese companies' access to key tech. Chinese chips stocks tumbleChina's largest chipmaker, Semiconductor Manufacturing International Corporation, traded 3% lower Monday afternoon in Hong Kong, amid a broader market sell-off. "It will not only harm Chinese companies' legitimate rights and interests, but also hurt the interests of U.S. The U.S. government previously put Chinese companies Huawei and SMIC on a blacklist that requires suppliers to obtain a license before selling to them.

TAIPEI, Oct 10 (Reuters) - War between Taiwan and China is "absolutely not an option", Taiwan President Tsai Ing-wen said on Monday, as she reiterated her willingness to talk to Beijing and also pledged to boost the island's defences including with precision missiles. "I want to make clear to the Beijing authorities that armed confrontation is absolutely not an option for our two sides. Only by respecting the commitment of the Taiwanese people to our sovereignty, democracy, and freedom can there be a foundation for resuming constructive interaction across the Taiwan Strait." Speaking in Beijing, Chinese Foreign Ministry spokesperson Mao Ning said Taiwan is part of China, "has no president and is not an independent country". "The root cause of the current tensions in the Taiwan Strait lies in the Democratic Progressive Party authorities' stubborn insistence on Taiwan independence and secession," she said, referring to Taiwan's ruling party.

☆ China tech shares sink as U.S. export curbs raise chip sector hurdles
▼ + stars: | 2022-10-10 | by ( ) www.reuters.com time to read: +7 min

The most immediate impact is likely to be felt by Chinese chipmakers, they said. The new regulations will now pose major hurdles for the two Chinese memory chipmakers, analysts said. A steep decline in tech shares led China's market down on its first post-Golden Week holiday trading on Monday. An index measuring China's semiconductor firms (.CSIH30184) tumbled nearly 7%, and Shanghai's tech-focused board STAR Market (.STAR50) declined 4.5%. SMIC dropped 4%, chip equipment maker NAURA Technology Group Co (002371.SZ) sank 10% by the daily limit, and Hua Hong Semiconductor plunged 9.5%.

☆ Taiwan signals its chip firms will follow new U.S. rules on China
▼ + stars: | 2022-10-08 | by ( ) www.reuters.com time to read: +3 min

Taiwan, a major chip producer, is home to Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW), the world's largest contract chipmaker and a major supplier to companies including Apple Inc (AAPL.O). "In addition to complying with domestic laws and regulations, it will also cooperate with the needs of international customers who place orders and the norms of customers in their countries." Taiwan has its own concerns about China, especially efforts by Chinese companies to poach chip talent and technical know-how. The government tightly restricts Taiwanese chip investment in China, the island's largest trading partner. She will visit U.S. tech firms that are major customers of Taiwanese semiconductor companies.

Now, the United States is going after China's advanced computing and supercomputer industry. The provision called the foreign direct product rule, or FDPR, was first introduced in 1959 to control trading of U.S. technologies. So they expanded the FDPR to control trade of chips made using U.S. technology or tools. The latest move would ban any semiconductor manufacturing firm that uses American tools - which most do - from selling advanced chips to China, said Karl Freund, a chip consultant at Cambrian AI who watches the supercomputing space. In that case, it could take China five to 10 years to catch up to today's technology, he added.

☆ Opinion: The Fed doesn’t have a choice anymore. Get ready for a recession
▼ + stars: | 2022-10-07 | by ( Gad Levanon For Cnn Business Perspectives | ) edition.cnn.com time to read: +5 min

On the other hand, overall employment growth has been much stronger than normal. Why has employment growth remained so strong? And it’s likely that these represent structural changes to buying patterns that will keep demand high. Employment growth is likely to slow down from its historically high rates, but it will still remain solid in the coming months. The only option that leaves the Fed is to engineer a recession by continuing to raise interest rates.

The raft of measures could amount to the biggest shift in U.S. policy toward shipping technology to China since the 1990s. If effective, they could hobble China's chip manufacturing industry by forcing American and foreign companies that use U.S. technology to cut off support for some of China's leading factories and chip designers. The rules published on Friday also block shipments of a broad array of chips for use in Chinese supercomputing systems. "The U.S. should stop the wrongdoings immediately and give fair treatment to companies from all over the world, including Chinese companies." On Saturday, China's foreign ministry spokesperson Mao Ning called the move an abuse of trade measures designed to reinforce the United States' "technological hegemony".

Customers try out new iPhones at an Apple store as iPhone 14 series go on sale on September 16, 2022 in Shanghai, China. Shares of Apple fell about 2.6% in premarket trading on a report that the company has told suppliers to bail on plans to increase iPhone 14 production. Apple will no longer aim to increase production by 6 million units in the second half of the year as it had planned, according to the report. The company will strive to produce 90 million units instead, which is roughly in line with Apple's forecast and production from last year, according to Bloomberg. WATCH: Apple launches iPhone 14 as customers line up to meet Tim Cook and get new tech

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