By Greg Gao

Chinese chip stocks sank 10-20% on October 10 after the US announced new export controls limiting China’s ability to produce high-end semiconductors, JW Insights reported.

The US Department of Commerce placed 31 Chinese companies and research institutes on the “Unverified List” that restricts their ability to access specific US semiconductor technology. This means US suppliers will face new hurdles in selling technologies to those entities.

Affected by this, many Chinese A-share listed semiconductor companies plummeted at the opening of October 10. Among them, the shares of Leaderdrive (绿的谐波), a harmonic gearing device manufacturer, and Hygon Information Technology (海光信息) , a high-end processor firm, fell by 20%.

The stocks of semiconductor equipment and material companies, including ACM Research (盛美上海), Piotech (拓荆科技), Advanced Micro-Fabrication Equipment (中微公司), Kinglai Group (新莱应材), Hangzhou Changchuan Technology (长川科技), Hwatsing (华海清科) fell by more than 10%. The semiconductor equipment provider Naura Technology (北方华创), and semiconductor materials firm Yoke Technology (雅克科技) plunged to the daily limit.

The US Commerce Department has added Beijing Naura Magnetoelectric Technology(磁电科技), a subsidiary of Naura Technology Group, to its Unverified List, Naura Technology said in a recent filing. The company emphasized that the overall impact is controllab and it will continue to pay attention to this, actively cooperating with relevant departments and institutions.

The high-end chip company Hygon Information said that the US export restrictions would bring both opportunities and challenges to the development of China’s domestic GPU industry. So far the company has benefited the support of national policies, domestic substitution trends, the market growth as well as its own core technological strength and  professional R&D team.

Meanwhile, anger and frustration remain with Chinese officials and industry professionals towards the US ban.

“The US has been abusing export control measures to wantonly block and hobble Chinese enterprises,” Chinese Ministry of Foreign Affairs Spokesperson Mao Ning said at a briefing recently.

“Such practice runs counter to the principle of fair competition and international trade rules,” she said. “It will not only harm Chinese companies’ legitimate rights and interests, but also hurt the interests of US companies.” according to a media report.