Wall Street’s semiconductor index led massive losses on Wednesday, with over $480bn in stock market value wiped out in the worst session since 2022. This dramatic decline was prompted by reports suggesting that Washington is considering tighter restrictions on the export of advanced semiconductor technology to China.

Republican presidential nominee Donald Trump’s comments about Taiwan further fueled the sell-off in chip stocks, with US-listed shares of companies like ASML Holding and Nvidia plummeting. The potential for severe trade curbs if companies continue to provide Beijing with access to advanced semiconductor technology has rattled the market.

On the other hand, companies with chip manufacturing operations in the US, such as Intel and GlobalFoundries, saw gains. Analysts suggest that Intel could benefit from the geopolitical tensions due to its investments in American plants.

Despite the immediate market reactions, experts believe that the fundamental factors driving these markets remain unchanged. The Biden administration’s efforts to limit Chinese access to cutting-edge chip technology have already impacted US chipmakers’ sales to China.

With uncertainties looming over Intel’s ability to revitalize its manufacturing business, questions remain about the future of the semiconductor industry. Whether Trump or Biden remains in power, the focus on semiconductors is expected to continue, potentially leading to more export restrictions to China and support for domestic chipmakers.