China’s microchip industry is feeling the heat of Beijing’s regulatory scrutiny.
A warning in state media on Friday last week that regulators would show no tolerance in cracking down on speculators in the chip market sent related shares lower yesterday.
Shares of China’s biggest chip foundry Semiconductor Manufacturing International Corp (SMIC, 中芯國際) dropped 5 percent in Hong Kong, while those of Hua Hong Semiconductor Ltd (華虹半導體) tumbled 5.7 percent, their worst drop in nearly three months.
Shanghai-listed Will Semiconductor Co (韋爾半導體) shares fell 5.7 percent, while those of Hubei Tech Semiconductors Co (湖北台基半導體) were down 3.3 percent.
For investors, the warning presents another challenge in an increasingly uncertain regulatory landscape, coming soon after the launch of a probe this month into possible price manipulation — chilling a sector buoyed by a global semiconductor shortage.
SMIC has also rallied this year on bets that semiconductor firms would benefit from state largesse, even as Beijing pursues a broader crackdown in the technology sector that has ensnared the likes of Alibaba Group Holding Ltd (阿里巴巴) and Tencent Holdings Ltd (騰訊).
Broadcaster China Central Television in a commentary on Friday last week said that some auto chip distributors have “maliciously” pushed up prices.
It urged sellers to be disciplined and refrain from hoarding components.
A prolonged global chip shortage has driven up prices of chipsets, complicating China’s bid to gain clout in advanced components used in devices from smartphones to base stations.
Chinese automakers, for example, import about 90 percent of the high-end chips they require.
Traders have been cautiously looking for signs as to what other sectors could next be targeted by Beijing after a ban on profits for after-school tutoring firms triggered a sell-off last month, amid concerns over further crackdowns in digital gaming, e-cigarettes and property.
Separately, China’s cyberspace watchdog yesterday said that authorities have arrested 59 people and seized 25,000 illegally controlled webcams in a crackdown on illegal camera voyeurism.
The Cyberspace Administration of China (CAC) said in a statement that it and other government agencies, including the Chinese Ministry of Industry and Information Technology, the Chinese Ministry of Public Security and the State Administration of Market Regulation, have been stepping up efforts to crack down on voyeuristic behavior, including “trading private videos.”
Online content platforms including Baidu Inc (百度), Tencent and Alibaba’s UC Browser have “cleaned up” more than 8,000 pieces of illegal voyeuristic information and punished 134 illegal accounts, the CAC said.
E-commerce platforms such as JD.com Inc (京東), Alibaba’s Taobao (淘寶) and Xianyu (閒魚) took offline a total of 1,600 cameras that had been advertised or sold illegally, it said.
Additional reporting by Reuters
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