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The Impact of the Semiconductor Exports Bans to China on the Stock Prices in Taiwan's Semiconductor Industry

Author

Listed:
  • Bi-Huei Tsai

    (National Yang Ming Chiao Tung University)

  • Pei-Pei Wang

    (National Yang Ming Chiao Tung University)

Abstract

This study finds that the U.S. sanctions on Chinese semiconductors result in significantly negative abnormal returns for Taiwan's semiconductor industry, including the upstream IC design sector and the midstream manufacturing sector. The U.S. sanctions enable investors to expect the difficulty of Taiwan?s IC design industry in obtaining orders from Chinese companies. Investors sell the stock of Taiwan?s IC design industry, so the stock prices of Taiwan?s IC design industry decline substantially. Negative abnormal returns are generated during the announcement of U.S exports bans to China. The impact of U.S. sanctions on Chinese semiconductors is obviously more significant on Taiwan's upstream IC design industry than on the midstream manufacturing and downstream packaging and testing industries. Conversely, the gap between IC manufacturing and packaging industries is small.

Suggested Citation

  • Bi-Huei Tsai & Pei-Pei Wang, 0000. "The Impact of the Semiconductor Exports Bans to China on the Stock Prices in Taiwan's Semiconductor Industry," Proceedings of Economics and Finance Conferences 15116739, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:15116739
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    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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