KUALA LUMPUR (Oct 11): Malaysian semiconductor-related stocks faced selling pressure on Tuesday (Oct 11), after the US expanded its export restrictions against China to include advanced semiconductor and chip-making equipment.

The Bursa Malaysia Technology Index fell as much as 3.2%, before paring losses to close at 58.96, down 3.1% or 1.91 points.

The biggest casualty is Frontken Corp Bhd, a semiconductor precision cleaning service provider, which saw its share price drop 10% or 28 sen to RM2.42, bringing year-to-date (YTD) decline to 39.5%.

Inari Amertron Bhd, the country’s largest semiconductor-related stock and a constituent of the FBM KLCI, dropped 3.9% or 10 sen to RM2.47, valuing the group at RM9.21 billion. YTD, the stock has fallen 38.25%, while the Technology Index dropped 39% over the same period.
 
Aemulus Holdings Bhd, which was described by Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz in his Budget 2023 speech on Friday (Oct 7) as one of the “successful local technology-based companies”, was down 5% or two sen at 38 sen, bringing its YTD decline to 69%.

Most other large semiconductor-linked counters like Malaysian Pacific Industries Bhd (MPI), D&O Green Technologies Bhd, Unisem (M) Bhd, VS Industry Bhd, SKP Resources Bhd, ViTrox Corp Bhd, Greatech Technology Bhd, UWC Bhd, Pentamaster Corp Bhd and Mi Technovation Bhd, all settled lower at noon market break. (See Table)

On Friday, the US Commerce Department issued a statement announcing a series of export controls, as part of its ongoing efforts to protect the country’s “national security and foreign policy interests”.

“These updates will restrict the People’s Republic of China’s ability to both purchase and manufacture certain high-end chips used in military applications and build on prior policies, company-specific actions, and less public regulatory, legal and enforcement actions taken by the Bureau of Industry and Security,” the department said.

Meanwhile, Bloomberg reported that chip-related stocks in Japan, South Korea and Taiwan slumped, as the move by the Biden administration to curb China’s access to US semiconductor technology sparked a sell-off that has wiped out more than US$240 billion (RM1.12 trillion) from the sector’s market value globally.

Taiwan Semiconductor Manufacturing Co (TSMC) plunged more than 7%, the most since May 2021, while Samsung Electronics Co dropped the most in a year. Tokyo Electron Ltd lost as much as 5.8%. Markets in South Korea, Japan and Taiwan were shut on Monday for holidays, when the Philadelphia Stock Exchange Semiconductor Index sank to its lowest close since late 2020, following a two-day rout of over 9%.

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