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☆ 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 became the first U.S. semiconductor company to put a dollar figure to the perceived impact. Register now for FREE unlimited access to Reuters.com RegisterChina accounted for 29% of Applied Materials' total sales in 2021, according to Evercore ISI analyst C.J. Applied Materials said the restrictions would reduce its fourth-quarter net sales by about $400 million, plus or minus $150 million. Adjusted profit is expected to be $1.54 to $1.78 per share, down from an earlier forecast of $1.82 to $2.18. Applied Materials' warning comes as the global chip industry already faces major headwinds from tumbling demand post-COVID in computers, smartphones and other electronic devices.

☆ 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.

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

Oct 12 (Reuters) - Applied Materials Inc (AMAT.O) said on Wednesday export curbs related to China's chip industry would result in a net sales hit of $250 million-$550 million in the quarter ending Oct. 30, with a similar impact expected in the following three months. Register now for FREE unlimited access to Reuters.com RegisterApplied Materials said the regulations would reduce its fourth-quarter net sales by about $400 million, plus or minus $150 million. Adjusted profit is expected to be $1.54 to $1.78 per share, down from an earlier forecast of $1.82 to $2.18. "Applied is pursuing additional export licenses and authorizations where needed," the company said in a statement. Register now for FREE unlimited access to Reuters.com RegisterReporting by Arunima Kumar and Yuvraj Malik in Bengaluru; Editing by Krishna Chandra EluriOur Standards: The Thomson Reuters Trust Principles.

☆ 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.

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.

☆ 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%.

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".

☆ What Cramer is watching Wednesday — oversold market bounce; promising Alzheimer's drug
▼ + stars: | 2022-09-28 | by ( Jim Cramer | ) www.cnbc.com time to read: +6 min

Citi crushes the autos with price target cuts: $78 per share from $87 for General Motors (GM); $13 from $16 for Ford (F). Citi lowers its price target on Caterpillar (CAT) $180 per share from $195. Downgrades NSC to neutral from positive (hold from buy), cuts price target to $218 per share from $275. Barclays cuts price target on AMAT to $85 per share from $95, keeps equal weight (hold) rating. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.

☆ Wonder where the economy is heading? Pay close attention to earnings
▼ + stars: | 2022-09-20 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +5 min

Economic bellwether FedEx (FDX) stunned Wall Street last week with a massive earnings warning and tepid outlook for the global economy. Still, investors remain nervous about the health of the railroad business, a sign of the jitters about the overall economy. Most of Corporate America operates on a calendar year schedule for earnings, which means they will report third quarter results in October. That would be the worst quarter for earnings since a 5.7% decrease in the third quarter of 2020, when the economy was reeling from Covid-imposed lockdowns. That adds to the risk that a global spike in rates will lead to a further slowdown in earnings, consumer spending and the overall economy.

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