European and Asian chip sector stocks such as ASML Holding NV (NASDAQ:ASML) and Tokyo Electron rose on reports that the US government is preparing to tweak restrictions on semiconductor equipment and AI memory chip sales to China.
The rules, which may be unveiled next week, will target specific Huawei suppliers and chipmaking factories, Bloomberg reported.
President Joe Biden's administration is aiming to curb Beijing’s tech ambitions while avoiding harsher measures previously considered for US and other companies outside of China that supply into the People's Republic.
Earlier this year, the White House hiked tariffs on key Chinese imports, including electric vehicles, microchips and steel.
New adjustments are being planned due to lobbying from US chip equipment makers, who warned stricter sanctions could harm their competitiveness.
Japan and the Netherlands, where several major tech suppliers are based, remain hesitant to match the US's tougher restrictions, despite ongoing negotiations.
Chip stocks in Asia and Europe rallied on the news, including a 3% rise for Netherlands based ASML and 2% for BE Semiconductor Industries NV, with a 6% gain for Tokyo Electron.
Bloomberg said Samsung Electronics Co Ltd (ADR) (LSE:BC94), SK Hynix Inc and US memory chip maker Micron Technology Inc (NASDAQ:MU) are expected to be affected by the new measures, though shares were little moved.