By Sherry Qin
Chinese semiconductor stocks fell sharply after news that the Trump administration is considering easing some restrictions on chip exports to China, which could undermine the appeal of domestically made chips.
Shares of Semiconductor Manufacturing International Corp., China's largest contract chip maker and the only one capable of making advanced chips, dropped as much as 7.4% early Monday before paring some losses. China's No.2 foundry, Hua Hong Semiconductor, declined 6.2%, while ASMPT was down 2.1%.
The Trump administration is having preliminary conversations about potentially allowing Nvidia to send its H200 AI chip to China, The Wall Street Journal reported Friday, citing people familiar with the discussions. The H200 chips would be a significant step up from the H20, which the U.S. approved earlier this year but China said it didn't want due to alleged security concerns.
Chinese semiconductor stocks tend to "trade in reverse to the tenacity of proposed U.S. rules," Morningstar analyst Phelix Lee said.
Easing U.S. export rules may diminish the appeal of domestically made AI chips and disrupt China's tech self-reliance thesis.
However, analysts think China may not be interested in the H200 chips or could mandate that state-owned enterprises buy locally made chips in support of self-sufficiency efforts.
China is more interested in buying more advanced chip-making equipment so it can expand its advanced-chip capacity and produce enough AI chips, Jefferies analysts said in a research note.
Jefferies analysts said they weren't surprised by the latest twist to the Trump administration's stance as China's rare-earth export controls, which have been suspended as part of the trade truce, gives China significant leverage in trade negotiations.
"The U.S. will need to consider easing export control in some areas against China to reach a trade deal with China," the Jefferies analysts added.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
November 23, 2025 22:48 ET (03:48 GMT)
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