Apr 22, 2023 06:46 PM

China Chips’ Market-Beating Rally at Risk as U.S. Tensions Flare

Workers produce computer chips at a semiconductor manufacturing company on March 28 in Ganzhou, East China’s Jiangxi province. Photo: VCG

(Bloomberg) — A searing rally in Chinese chip stocks is facing a reckoning as investors worry intensifying tensions with the U.S. may strangle the sector’s growth despite Beijing’s efforts to achieve self reliance.

A FactSet gauge tracking the nation’s chip-related firms slumped more than 5% Friday, trimming the year’s advance to 15%.

Advanced Micro-Fabrication Equipment Inc. and the nation’s largest chip foundry, Semiconductor Manufacturing International Corp., have still surged more than 50% compared with a 4.2% gain in the onshore CSI 300 benchmark.