Tech selloff hits the ASX over US semiconductor trade restrictions fears
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The news: The tech sector is the worst performing on the ASX today following the Nasdaq's tech selloff as the US considers toughening its trade restrictions on advanced semiconductors.
The numbers: WiseTech was down 5.84% to $93.87, NextDC was down 4.22% to $17.26, and Xero was down 2.53% to $136.87 by 12:45 pm.
The IT sector was down 3.06% compared to a wider ASX 200 drop of 0.15%.
The NYSE’s semiconductor index plunged on open on Wednesday, and has since lost over USD500 billion ($741.9 billion) in value.
The context: Tech stocks reliant on microchip production began crashing on Wednesday after Bloomberg received anonymous reports that the Biden administration was considering stricter trade measures against semiconductor manufacturers that inhibit China’s access.
The legislation would primarily affect Tokyo Electron and ASML Holding, which hold a near monopoly on the global supply of advanced semiconductors and are China’s essential microchips supplier.
The selloff continued following Trump’s comments suggesting that Taiwan, a major advanced semiconductor manufacturing hub, should pay the US government for its defence.
The source: Bloomberg
