Chinese chip stocks fell after the US called for new restrictions on high-end technology

The US said it would grant a temporary license from October 21 to April next year to allow businesses to manufacture certain high-tech products in China for use outside the country.

China’s largest chipmaker Semiconductor Manufacturing International CorporationHong Kong traded 3% lower on Monday afternoon, amid a broader market sell-off.

Hua Hong Semiconductor A decrease of about 9% Shanghai Fudan Microelectronics It was down more than 20% as of Monday afternoon.

Shares of US chipmakers Nvidia And AMD The sector fell in Friday’s trading session as worries about falling demand dragged down the sector.

“The United States is misusing export control measures to ban and ban Chinese companies,” Chinese Foreign Ministry spokesman Mao Ning told a briefing over the weekend, according to an official English-language transcript.

“Such a practice is against fair competition and international trade rules,” he said. “This will not only harm the legitimate rights and interests of Chinese companies, but also harm the interests of American companies.”

Mao did not mention plans for Chinese countermeasures.

The global semiconductor supply chain is highly specialized. Only a few companies have the most advanced technology, while China is investing heavily in trying to catch up with domestic players.

Taiwan Semiconductor Manufacturing Co Dominating the manufacturing capacity for the world’s most advanced semiconductors. Netherlands-based ASML The only company in the world The more complex machines needed to produce more advanced chips can be built.

On the other hand, US companies such as Lam Research, KLA and Applied Materials are leading the industry. For other tools needed to make chips.

The US government has previously targeted Chinese companies such as Huawei and Blacklist SMIC Suppliers must obtain a license before selling to them.

But those two companies’ suppliers were licensed to do billions of dollars worth of business last year. According to Reuters.

The U.S. Bureau of Industry and Security estimates that recent rule changes mean just that Receives at least 1,600 new license applications per year.

International cooperation is also needed, a senior US government official told a briefing on Thursday. Reuters reported.

“Unless other countries join us, we recognize that unilateral restrictions will lose effectiveness over time,” the official said in the statement. “If foreign competitors are subject to similar restrictions, we risk harming U.S. technology leadership.”

The U.S. Embassy in Beijing did not immediately respond to a CNBC request for comment on the report.