US Revokes Intel, Samsung, SK Hynix Waivers On China Chip Equipment

The U.S. announced on Friday plans to tighten restrictions on global chipmakers operating in China, revoking authorizations that allowed Samsung Electronics, SK Hynix, and Intel (INTC) to receive American semiconductor manufacturing equipment in the country.

According to a notice in the Federal Register, the restrictions take effect in 120 days. Intel continues to produce wafers in China even though it sold its Dalian NAND plant to SK Hynix in 2021. Now, the companies will need to obtain licenses to buy the equipment in China. 

Intel’s stock price edged 1% lower in morning trade. The broader market is also trending lower after it was reported that the personal consumption expenditure (PCE) index rose 2.6% in July, higher than the Federal Reserve’s 2% target. On Stocktwits, retail sentiment around the former PC giant trended lower but remained in ‘bullish’ territory as chatter dipped to ‘normal’ from ‘high’ levels over the past day. 

The rule change could weigh on sales by U.S. equipment makers KLA Corp. (KLAC), Lam Research (LRCX), and Applied Materials (AMAT). At the same time, it may create openings for Chinese suppliers and benefit Micron (MU), a key U.S. rival to Samsung and SK Hynix in the memory market.

Lam Research’s stock dropped nearly 3.5% in morning trade, while KLA’s stock fell 2.2% and shares of Applied Materials were down 2%. However, retail sentiment on Stocktwits around Lam Research improved to ‘bearish’ from ‘extremely bearish’ territory over the past day. Retail sentiment around Applied Materials and KLA Corp. continued to trend in ‘bearish’ territory. 

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