According to recent sources, China’s microchip industry is feeling the heat of Beijing’s regulatory scrutiny as the Chinese administration increases its pressure on consumer service providers with the chip industry being next on the list.
On the state media last Friday a warning was issued that the regulators will show no tolerance in cracking down on speculators in the chip market. This warning sent the related stocks lower on Monday which was a hard blow for the Chinese chip market which is already suffering from the US ban and chip manufacturing material shortage.
China’s biggest chip foundry Semiconductor Manufacturing International Corp (SMIC) dropped 5 per cent in Hong Kong, and the Hua Hong Semiconductor tumbled 5.7 per cent which is its worst drop in nearly three months. Even the Shanghai-listed Will Semiconductor fell by 5.7 per cent, and the Hubei Tech Semiconductors was down 3.3 per cent.
Almost all big names in China’s chip market fell by more than 2% which is quite alarming for their investors. The warning presents another challenge in an increasingly uncertain regulatory landscape for not only china’s chip makers but also their investors. This is the second crackdown by the government after it recently launched a probe this month into possible chip price manipulation. This was disheartening for the chip makers as they are already suffering from a global semiconductor shortage that is approaching the 12-month mark.
This all started and markets plummeted largely because, on Friday, broadcaster CCTV said that some car chip distributors have “maliciously” pushed up prices. It urged sellers to be disciplined and refrain from hoarding components in the crisis time when the demand for chips has increased tremendously and china is competing with the rest of the world for semiconductor dominancy.