Wall St futures flat amid US-China trade jitters; bank earnings in focus
Investing.com-- Chinese chipmaking stocks fell sharply on Tuesday, as heightened trade tensions with the U.S. sparked extended profit-taking in the high-flying sector.
Markets also grew concerned over increased scrutiny of Chinese companies in the West, after reports said the Dutch government had wrested control of a local chipmaker from its Chinese owner.
Hong Kong-listed chipmakers Semiconductor Manufacturing International Corp (HK:0981) and Hua Hong Semiconductor Ltd (HK:1347) slid 6% and 9.9%, respectively, while Shanghai-listed Cambricon Technologies Corp Ltd (SS:688256) shed 3.7%.
Wingtech Technology Co Ltd (SS:600745) slid 10% in Shanghai trade after the Dutch government seized control of its Nexperia unit, citing concerns over economic security.
The report came shortly after U.S. President Donald Trump threatened to impose 100% tariffs against China over its rare earth export controls. Trump’s threat, which drew a sharp rebuke from Beijing, sparked extended selling in Chinese markets, as traders braced for a renewed trade war between the world’s biggest economies.
A bulk of this selling was directed at chipmakers, which were sitting on frothy gains so far in 2025 on optimism over China’s artificial intelligence ambitions. Beijing was seen pushing for more locally-sourced AI chips, which in turn drummed up optimism over local chipmakers.
SMIC and Cambricon were among the biggest beneficiaries of this trend, with Cambricon in particular being positioned as China’s leading AI chips developer.
But frothy valuations also left the sector more vulnerable to profit-taking, with investors seen locking-in hefty profits this week.