| | | Semiconductor Stocks Are Soaring After the G20 Meeting. But the Devil Is in the Details. -- Barrons.com
DOW JONES & COMPANY, INC. 12:28 PM ET 7/1/2019
Symbol Last Price Change | INTC | 48.05 | +0.18 (+0.38%) | | NVDA | 166.17 | +1.94 (+1.18%) | | ADI | 115 | +2.13 (+1.89%) | | AVGO | 300.35 | +12.49 (+4.34%) | | QCOM | 77.52 | +1.45 (+1.91%) | | TXN | 117.19 | +2.43 (+2.12%) | | AMD | 31.2 | +0.83 (+2.73%) | | NXPI | 99.92 | +2.31 (+2.37%) | | XLNX | 121.15 | +3.23 (+2.74%) | | MCHP | 91.4 | +4.7 (+5.42%) | | QRVO | 70.58 | +3.97 (+5.96%) | | SWKS | 81.91 | +4.64 (+6%) | | MRVL | 24.27 | +0.4 (+1.68%) | | LITE | 54.47 | +1.06 (+1.98%) | | QUOTES AS OF 04:00:00 PM ET 07/01/2019 |
Semiconductor stocks sensitive to U.S.-China trade are rising on Monday morning following the weekend's G20- sidelines meeting between President Donald Trump and Chinese President Xi Jinping in Japan. Companies involved in semiconductor design and manufacturing have been caught in the middle of the trade war, with many firms having supply chain and customer exposure in both of the world's two largest economies.
Although all current tariffs remain in place, the Trump-Xi meeting ended with an agreement to restart trade talks. The U.S. will also potentially lift some export restrictions on suppliers doing business with Chinese telecommunications hardware giant Huawei Technologies, which has been the target of a U.S. ban since May.
The iShares PHLX Semiconductor ETF , which tracks an index of U.S. stocks in the semiconductor sector, rose 3.5% on Monday morning, versus a 0.9% rise for the S&P 500.
"At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy product from them which will not impact our National Security," Trump tweeted on Saturday night. The president's economic adviser Larry Kudlow later told Fox News Sunday that Huawei will remain subject to "serious" exports controls.
Bullish investors' hope is presumably that what starts as narrow exemptions on non-sensitive technologies will lead to a greater accord that includes the removal of all new tariffs imposed since last summer.
"It may be that Trump's statement, to the extent it carries any real weight (we may just be getting jaded but we have seen this before) may just indicate more willingness to be a bit more liberal in granting export licenses for specific products where national security impact is deemed minimal," wrote Bernstein semiconductor analyst Stacy Rasgon in a report on Monday. "...it remains unclear if anything has really changed as there are already mechanisms by which (uncontrolled) products can be sold to Huawei."
Rasgon sees high-performance computing chips or products with artificial intelligence or 5G applications most unlikely to be exempted from the export ban. He cites Intel(INTC) , Nvidia(NVDA) , and Analog Devices(ADI) as potentially most exposed to products sensitive to national security concerns. The companies' stocks rose 0.9%, 2.8%, and 1.8%, respectively, in Monday morning trading.
Broadcom (AVGO) counts Huawei as a larger customer for its networking and storage products, which Rasgon believes could have an easier path to exemptions. After declining over 20% in May as the Huawei situation deteriorated, the stock also has more ground to recover. Shares rose 5.2% on Monday.
Other major semiconductor stocks rising on Monday morning include Qualcomm(QCOM) , up 2.3%; Texas Instruments(TXN) , up 2.6%; Advanced Micro Devices(AMD) , up 3.9%; NXP Semiconductors(NXPI) , up 3.6%; and Xilinx(XLNX) , up 2.7%.
Smaller firms that supply some components to Huawei also saw their stocks pop on Monday. Microchip Technology(MCHP) rose 5.2%, Qorvo(QRVO) rose 5.3%, Skyworks Solutions(SWKS) rose 6.1%, Cree (CREE) rose 4.8%, Marvell Technology Group Ltd.(MRVL) rose 2.2%, and Lumentum Holdings(LITE) rose 2.9%.
Year to date, the SOXX is now up 30.5%, while the broader S&P 500 index has climbed 17.4%.
Write to Nicholas Jasinski at nicholas.jasinski@barrons.com
|
|
