ASML surges on report US will exempt allies from China chip restrictions

Dutch chip equipment maker ASML surged on Wednesday following a report it will be exempt from new US rules on foreign chip equipment exports.

Earlier, Reuters cited two sources familiar with the matter as saying that the Biden administration plans to unveil a new rule next month that will expand US powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers.

However, it was understood that shipments from allies that export key chipmaking equipment - including Japan, the Netherlands and South Korea - will be excluded, limiting the impact of the rule.

As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected.

At 1010 BST, ASML shares were up 6% at €854.10.

Russ Mould, investment director at AJ Bell, said: "The tech sector might have experienced some choppy sessions of late, but sometimes it only takes one small nugget of good news to win over investors.

"The Biden administration is worried that China is still getting its hands on advanced technology that could be deployed by its military, hence talk of a fierce clampdown on foreign kit reaching its shores. Reports suggest the US will exclude certain allies from the export restrictions, including Japan, the Netherlands and South Korea.

"ASML and Tokyo Electron were caught up in chatter earlier in this month about the US getting tougher over technology going to China, so a rebound in both of their share prices on the latest reports is the market breathing a sigh of relief that their business may not face significant disruptions."