Technology stocks worldwide have slumped amid fears about the global computer chip industry.
The sell-off followed a report suggesting that the Biden administration might further tighten restrictions on exporting semiconductor equipment to China.
Former US President Donald Trump’s comments that Taiwan, the largest chip producer, should pay for its own defense added to these concerns.
In the US, the tech-heavy Nasdaq index closed 2.7% lower on Wednesday, with chip stocks also falling in Europe and Asia.
“Regardless of the outcome of the elections… I think we will see the US increase some of the restrictions,” said Bob O’Donnell, chief analyst at TECHnalysis Research. “How far they will take it, though, is the big question.”
In Asia, chip-making giant TSMC lost 2.4% on Thursday, while semiconductor equipment maker Tokyo Electron dropped around 8.8%.
This came after Nvidia closed 6.6% lower in New York on Wednesday, and AMD lost more than 10%.
In Europe, shares in ASML, a maker of chip-making machines, tumbled by almost 11%.
These declines followed a Bloomberg News report on Wednesday stating that the US government is preparing to impose its tightest curbs yet on semiconductor-making equipment to China if firms like ASML and Tokyo Electron continue to provide the country access to their advanced chip technology.
The Biden administration has previously taken steps to restrict China’s access to advanced chip technology. In October, it restricted exports to China of advanced semiconductors used in artificial intelligence (AI) technology.
Mr. Trump’s remarks on Taiwan also hinted at possible disruption of global chip supplies. Taiwan produces most of the world’s advanced chips.
“Investors always react to any remarks from the US but despite these comments, the long-term business trend for the semiconductor industry is clearly going up,” said Marco Mezger, Executive Vice President of memory chip technology company Neumonda.