Billions of dollars in market value was lopped off Asia’s listed chipmakers after the US announced new sanctions on Huawei, which one analyst billed a “death sentence” for the Chinese telecoms group, reported the Financial Times.
Taiwan’s MediaTek fell 9.9% on Tuesday while Hong Kong-listed hardware makers Sunny Optical and AAC Technologies dropped as much as 11.5 and 5.3%, respectively. All three provide technology components to Huawei.
The new sanctions, announced by US commerce secretary Wilbur Ross, require companies to obtain a license before selling Huawei any microchip made using US equipment or software. Licenses will be required even if Huawei is not the end customer and only plays an intermediate role in the supply chain.
“The US government has passed a death sentence on Huawei,” said Dan Wang, an analyst at Gavekal Research. “Huawei is probably finished as a maker of 5G network equipment and smartphones once its inventories run out early next year.”
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