Semiconductor stocks fell on Friday following a Wall Street Journal report that a senior U.S. official informed leading global chipmakers of plans to revoke waivers that currently allow them to use American technology in China. Applied Materials (AMAT) and Lam Research (LRCX) both fell roughly 4%. Taiwan Semiconductor Manufacturing Company (TSM) and Broadcom (AVGO) also declined.
The U.S. government has notified major global semiconductor firms of its intent to revoke waivers that currently allow them to use American technology in China, according to a Friday report by The Wall Street Journal, which cited sources familiar with the matter.
Jeffrey Kessler, under secretary of commerce for industry and security at the U.S. Commerce Department, reportedly informed Samsung Electronics, SK Hynix, and Taiwan Semiconductor Manufacturing this week that he intended to cancel the waivers, WSJ said.
The potential policy change is reportedly part of the Trump administration’s broader efforts to restrict critical U.S. technology from going to China. If implemented, the move could create significant disruption both diplomatically and economically, coming shortly after the U.S. and China established a trade truce in London.
White House officials have said that this action would not represent a new trade escalation but would instead align the licensing system for chip equipment with China’s existing system for rare-earth materials. They added that the U.S. and China continue to make progress on completing their London agreement.
The semiconductor equipment industry is especially sensitive to shifts in U.S.-China trade policy, as many firms depend heavily on the Chinese market for a substantial share of their revenue.
The news sent shares of U.S. semiconductor equipment suppliers tumbling. KLA Corp fell 3.8%, Lam Research dropped 4.7%, and Applied Materials declined 3.8%.
A spokesperson for the Commerce Department responded to the report, stating: “Chipmakers will still be able to operate in China. The new enforcement mechanisms on chips mirror licensing requirements that apply to other semiconductor companies that export to China and ensure the United States has an equal and reciprocal process.”
If implemented, the action would make it significantly more difficult for foreign chipmakers to continue operating in China, where they manufacture semiconductors used across a broad range of industries.
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