- New US sanctions on Chinese group wipe billions of dollars off tech shares
Billions of dollars in market value was lopped off Asia’s listed chipmakers after the US announced new sanctions on Huawei, which one analyst billed a “death sentence” for the Chinese telecoms group.
Taiwan’s MediaTek fell 9.9 per cent on Tuesday while Hong Kong-listed hardware makers Sunny Optical and AAC Technologies dropped as much as 11.5 and 5.3 per cent, respectively. All three provide technology components to Huawei.
The sell-off came after the Trump administration on Monday announced strict new limits on the sale of any US-made chips to Huawei, which will restrict the Chinese company’s access to components such as those needed for 5G mobile networks. The US has accused Huawei of technology theft and breaching sanctions, while urging allies not to use its equipment.
“The US government has passed a death sentence on Huawei,” said Dan Wang, an analyst at Gavekal Research. “Huawei is probably finished as a maker of 5G network equipment and smartphones once its inventories run out early next year.”
The new sanctions, announced by US commerce secretary Wilbur Ross, require companies to obtain a licence before selling Huawei any microchip made using US equipment or software. Licences will be required even if Huawei is not the end customer and only plays an intermediate role in the supply chain.