Regulation from the US that scares the market

The Biden administration is reportedly considering the most severe possible trade restrictions if companies such as Tokyo Electron Ltd. and ASML Holding NV continue to access advanced semiconductor technology in the U.S., Bloomberg reported, citing sources familiar with the matter. The Biden administration has discussed whether to implement a measure called the Foreign Direct Product Rule, or FDPR. The sources said companies such as Tokyo Electron Ltd. and ASML Holding NV would be subject to trade restrictions if they continue to access advanced semiconductor technology in the country. One possible move could restrict the manufacturing activities of Tokyo Electron and ASML, which develop chip-making machines vital to the industry, in China. According to Bloomberg’s previous report, the U.S. is also considering additional sanctions on certain chip companies based in China. Following the news, Tokyo Electron’s shares fell 7.5 percent, leading Japan’s Nikkei 225 Stock Average to fall. ASML’s shares similarly fell 8.1 percent. The U.S. is “politicizing trade and the concept of national security,” Chinese Foreign Ministry spokesman Lin Jian told a news conference in Beijing on Wednesday. Lin also said relevant countries should resolutely resist pressure and uphold a fair and open international trade order to safeguard their own long-term interests. The first restriction came in 2022 The U.S. imposed sweeping restrictions on the sale of advanced chips and manufacturing equipment to China in October 2022 as part of its effort to block cutting-edge technology that could strengthen China’s military, and tightened the measures a year later. The rules have had a far-reaching impact. The move has dealt measurable damage to Chinese companies such as Huawei Technologies Co. and Semiconductor Manufacturing International Corp., making it harder for them to buy essential materials and equipment.