Biden administration announces new Chinese chips probe, Semiconductor stocks gain

Investing.com
Updated
Mitrade
coverImg
Source: Shutterstock

Investing.com -- U.S. semiconductor stocks mostly edged higher in premarket trading on Tuesday after the Biden administration launched a new trade investigation into Chinese-made legacy semiconductors. 

The probe, initiated under Section 301 of the Trade Act of 1974, could lead to additional tariffs on older Chinese chips that are used in everyday products such as automobiles, washing machines, and telecom gear.

Semiconductor companies like Broadcom (NASDAQ:AVGO), AMD (NASDAQ:AMD), and Marvell (NASDAQ:MRVL) Technology saw gains of around 1.8%, 1.8%, and 0.4%, respectively. Meanwhile, ETFs tracking the sector, including the SOXX and SMH, rose by 0.3% and 0.2%. Micron (NASDAQ:MU) also posted a modest gain of 0.1%, while Nvidia (NASDAQ:NVDA) and Taiwan Semiconductor saw slight declines of 0.3% and 0.8%.

The investigation is aimed at protecting U.S. semiconductor producers from China’s state-driven expansion of its chip industry, which has enabled Chinese companies to offer chips at artificially lower prices. 

U.S. Trade Representative Katherine Tai stated that the probe would help safeguard U.S. market competition and ensure that China does not dominate the global semiconductor market.

While the investigation will be completed under President-elect Donald Trump’s administration, the Biden administration's decision to move forward now could result in new tariffs on Chinese semiconductors. 

These tariffs would add to the 50% tariff on Chinese chips scheduled to take effect on January 1.

Reuters reported that China's commerce ministry said the probe raises concerns about potential disruptions to global chip supply chains.

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
S&P 500 Rides 5-Month Winning Streak Into the Seasonal Golden Window Q4For months, U.S. equity investors have largely shrugged off headwinds from Trump’s tariffs, economic slowdown concerns, and seasonal weakness.
Author  TradingKey
Sep 30, Tue
For months, U.S. equity investors have largely shrugged off headwinds from Trump’s tariffs, economic slowdown concerns, and seasonal weakness.
placeholder
Alibaba surges 50% in September, tops Hang Seng tech indexThe Hong Kong-listed stock rose as much as 4.1% to over HK$173 during Monday’s session.
Author  Cryptopolitan
Sep 29, Mon
The Hong Kong-listed stock rose as much as 4.1% to over HK$173 during Monday’s session.
placeholder
BYD shrugs off Buffett’s Berkshire sell-downBYD has confirmed that Berkshire Hathaway completely sold off its remaining shares earlier this year, ending a 17-year run that began in 2008.
Author  Cryptopolitan
Sep 28, Sun
BYD has confirmed that Berkshire Hathaway completely sold off its remaining shares earlier this year, ending a 17-year run that began in 2008.
placeholder
Meta Bets Billions on Robotics, Aiming to Become the "Android of Robotics"Building humanoid robots has become Meta's next "AR-level bet."
Author  TradingKey
Sep 28, Sun
Building humanoid robots has become Meta's next "AR-level bet."
placeholder
Trump Signs Order, TikTok U.S. Divestiture Officially BeginsPresident Donald Trump signed an executive order on Thursday formally approving the divestiture of TikTok’s U.S. operations, paving the way for the long-anticipated deal.
Author  TradingKey
Sep 26, Fri
President Donald Trump signed an executive order on Thursday formally approving the divestiture of TikTok’s U.S. operations, paving the way for the long-anticipated deal.