US-China tariff pause boosts global chip, tech stocks

Global semiconductor and tech stocks rose on May 12 after the United States and China agreed to pause most tariffs on each other’s goods.

In the US, semiconductor firms saw significant gains in premarket trading. Nvidia increased by 4%, AMD gained 5%, and both Broadcom and Qualcomm climbed around 5%.

Marvell Technology, which had delayed an investor day due to economic uncertainties, surged 7.5%.

Taiwan Semiconductor Manufacturing Co. (TSMC), the largest chipmaker in the world, experienced a 4% rise in its US-listed shares.

European semiconductor companies also benefited, with ASML rising 4.5% and Infineon recording notable increases in early trading.

While chips and certain electronics were temporarily exempt from Donald Trump’s tariffs last month, the US has indicated that these products may face duties in the future. This uncertainty has affected major technology companies, especially those with substantial ties to China.

On Monday, Apple shares increased by more than 6%. Amazon saw its stock rise over 8%.

Chinese tech stocks listed in the US also saw gains. Ecommerce companies Alibaba and JD.com, along with internet firm Baidu, recorded increases in their stock prices.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Semiconductor stocks’ heightened sensitivity reflects their uniquely global supply chains

The strong rally in semiconductor stocks reflects the sector’s particular vulnerability to trade tensions, beyond that of most industries.

Semiconductor companies face significant exposure because the industry conducts 40-50% of its global business with China, creating a dependence on stable trade relations 1.

Previous tariff escalations led to notable market impacts, including a 2% drop in the S&P 500 during one announcement, with semiconductor firms among the hardest hit 2.

The complex, multi-country semiconductor production process magnifies disruption risks, as a single chip might cross international borders multiple times before reaching its end market, making the industry particularly responsive to trade policy shifts.

TSMC’s market reaction is consistent with its dominant market position, as it produces approximately 60% of the world’s chips, making it a central player in virtually all electronics supply chains 3.