ASML Holding’s stock (NASDAQ:ASML) surged in early Wednesday trading following reports that the U.S. is likely to exclude chip equipment manufacturers in the Netherlands and other countries from its latest trade restrictions aimed at limiting China’s technological advancements.
According to Reuters, shipments of essential chipmaking equipment from several countries, including Japan and South Korea, will not be affected by the Biden administration’s expansion of the Foreign Direct Product Rule next month.
Expanded Restrictions Impact on Taiwan, Israel, and Singapore Exports
The proposed expansion is set to prevent around half a dozen Chinese semiconductor fabs from receiving exports from numerous countries, including Taiwan, Israel, Singapore, and Malaysia. Taiwan is home to the chip manufacturing giant Taiwan Semiconductor Manufacturing Company (NYSE:TSM).
ASML shares had faced difficulties earlier this month when Bloomberg reported that the Biden administration’s stricter curbs on China’s access to foreign chipmakers’ exports might target ASML and Japan’s Tokyo Electron.
The Commerce Department did not immediately respond to a request for comment on Wednesday.
Reuters’ report suggests that ASML and Tokyo Electron will be shielded from the new rules. Jefferies analysts noted in a report that this exemption could remove a significant negative factor impacting these stocks, which have experienced considerable underperformance in recent weeks.
ASML, known for its extreme ultraviolet (EUV) lithography machines capable of producing smaller and more powerful microchips, has seen its shares rise more than 20% this year. Tokyo Electron, which produces etching machines used in semiconductor manufacturing, closed up 7% in Japanese trading.
Featured Image: Megapixl
Author Faith Yakubu 
