KUALA LUMPUR, Dec 4 (Bernama) -- Bursa Malaysia rallied to close broadly higher on Wednesday amid strong buying interests mainly in utility and technology stocks, with the benchmark index gaining 0.44 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.13 points to 1,614.09 from Tuesday’s close of 1,606.96. The index opened marginally higher at 1,606.97 and moved between 1,606.53 and 1,616.03 throughout the day. Advancers thumped decliners 727 to 381 on the broader market, with 522 counters unchanged, 781 untraded and 10 suspended. Turnover advanced to 3.60 billion units valued at RM3.30 billion versus 3.32 billion units valued at RM3.30 billion on Tuesday.
The United States launched its third crackdown on China’s semiconductor sector in three years, introducing new export restrictions on 140 companies. This latest effort, announced Monday, aims to curb Beijing's chipmaking ambitions, citing concerns about advancing AI for military use and threatening US national security.
Key Highlights
New Export Restrictions
Targeted Companies:
- Chinese semiconductor toolmakers, including Naura Technology Group, Piotech, ACM Research, and SiCarrier Technology, face export restrictions.
- Companies like Swaysure Technology Co., Si'En Qingdao, and Shenzhen Pensun Technology, which collaborate with Huawei Technologies, have also been added to the Entity List.
Advanced Technology Curbs:
- Restrictions include high-bandwidth memory chips (HBM) critical for AI training and chipmaking tools produced globally by companies in countries like Singapore and Malaysia.
US Allies:
- The rule also impacts non-US firms such as ASM International (Netherlands) and Lam Research, KLA, and Applied Materials (US).
Foreign Direct Product Rule Expansion
- Equipment manufactured outside the US with US-origin technology now faces tighter restrictions.
- Exemptions apply to Japan and the Netherlands, following lengthy discussions with these key allies in chip equipment production.
AI and Memory Chips
- Controls on AI chips include HBM2 or higher technology, affecting South Korean firms like Samsung Electronics (30% of HBM chip sales tied to China) and SK Hynix, along with US-based Micron.
China's Response
Government Reactions:
- China’s Foreign Ministry condemned the restrictions as "economic coercion", accusing the US of disrupting global supply chains.
- The Commerce Ministry vowed to safeguard the interests of Chinese firms.
Self-Sufficiency Drive:
- While China has accelerated efforts to develop its semiconductor industry, it remains years behind global leaders like Nvidia in AI chips and ASML in chipmaking tools.
Geopolitical Context
Political Transition in the US:
- The move comes just weeks before President-elect Donald Trump takes office, signaling a continuation of the tough-on-China policies initiated under the Biden administration.
Global Reactions:
- Dutch equipment maker ASML said the restrictions may not materially affect its business unless similar controls are adopted by the Dutch government.
- Other nations like Israel, South Korea, and Taiwan face tighter restrictions under the US framework.
Industry Impacts
Chip Toolmakers:
- US and global semiconductor equipment manufacturers face revenue losses as they adapt to limited exports to China.
Chinese Firms:
- The restrictions hinder China's ability to secure cutting-edge technology, delaying advancements in AI and military applications.
Global Chip Supply Chains:
- Stricter controls are likely to increase costs and slow development for firms reliant on exports to China.
Analyst Perspective
This crackdown represents a critical escalation in the tech rivalry between the US and China, with long-term ramifications for the global semiconductor landscape. While the move underscores national security concerns, it may also exacerbate trade tensions and prompt retaliatory measures from Beijing.
Companies and investors across the tech sector will need to adapt strategies to navigate the evolving regulatory environment.
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