Global technology stocks have plunged over concerns about the computer chip industry. This decline follows reports suggesting the Biden administration may further restrict exports of semiconductor equipment to China. Former US President Donald Trump’s remarks that Taiwan, the largest chip producer, should finance its own defense have also contributed to the market’s anxiety.

In the US, the Nasdaq index dropped 2.7% on Wednesday, while chip stocks in Europe and Asia also saw significant declines. Bob O’Donnell, chief analyst at TECHnalysis Research, noted that further US restrictions on semiconductor exports to China seem likely, though the extent of these measures remains uncertain.

In Asia, TSMC, a leading chipmaker, fell 2.4% on Thursday, and Tokyo Electron, a semiconductor equipment manufacturer, saw an 8.8% drop. In the US, Nvidia’s shares closed 6.6% lower on Wednesday, while AMD’s shares fell over 10%. In Europe, ASML, which manufactures chip-making machines, experienced an 11% decline in its share price.

Bloomberg News reported that the US government might soon impose the strictest restrictions yet on semiconductor equipment exports to China if companies like ASML and Tokyo Electron continue to provide China with advanced chip technology. ASML and Tokyo Electron have not commented on these reports, and the US Commerce Department has yet to issue a statement.

The Biden administration has already taken measures to limit China’s access to advanced chip technology, such as the October restriction on exporting advanced semiconductors used in AI technology. Trump’s comments on Taiwan also hinted at potential disruptions in the global chip supply, given Taiwan’s critical role in producing advanced chips.

Despite these concerns, Marco Mezger, Executive Vice President of memory chip technology company Neumonda, expressed optimism, noting that the long-term business trend for the semiconductor industry remains positive.