Shares in Japanese semiconductor companies have surged after reports that the United States may impose milder restrictions on chip equipment and AI semiconductor sales to China.

Tokyo Electron Ltd., a chip production machinery manufacturer, saw its shares rise by up to 10%, the most since August.

Kokusai Electric Corp. experienced a 23% share increase at one point.

Companies such as Towa Corp. and Screen Holdings Co., both involved in chip equipment production, reported gains of 7.5% and 9.6%, respectively.

Andrew Jackson, head of Japan equity research at Ortus Advisors, said this development benefits Japanese chip stocks with significant exposure to the Chinese market.