Investing.com -- Taiwan Semiconductor Manufacturing (NYSE:TSM) stock fell 2%, Lam Research (NASDAQ:LRCX) shares tumbled 5%, and Applied Materials (NASDAQ:AMAT) dropped 4% following reports that a U.S. official plans to revoke technology waivers for chipmakers operating in China.
Jeffrey Kessler, who leads the export controls unit at the Commerce Department, has informed major semiconductor manufacturers including Taiwan Semiconductor Manufacturing, Samsung Electronics (KS:005930), and SK Hynix of his intention to cancel blanket waivers that currently allow them to ship American chip-making equipment to their factories in China without applying for separate licenses each time, according to the Wall Street Journal.
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 stated 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.
"Chip makers 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," a Commerce Department spokesman said.
The semiconductor equipment sector is particularly vulnerable to changes in U.S.-China trade policy, as many companies rely on access to the Chinese market for significant portions of their revenue.