Technology stocks in Japan, South Korea, and Taiwan fell, adding to a $240 billion loss in the sector’s global market valuation after the US government restricted China’s exposure to semiconductor technology.

Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest chipmaker, fell more than 8% on Tuesday, its worst drop since May 2021. Samsung Electronics and Tokyo Electronics both fell on concerns that the United States attempts to secure international cooperation would limit their potential to export to China.

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Currency markets were also hit by the selloff. The South Korean won fell as much as 1.6% against the US dollar, while the Taiwan dollar fell 0.7%.

The restrictions are anticipated to have far-reaching consequences. The measures would impose extra difficulties and need government approval for companies with production lines in China, including non-US companies. The decision is also expected to have a ripple effect throughout the sector’s supply chain, adding to a growing list of problems for technology stocks, which includes an aggressive Federal Reserve and unrest across the Taiwan Strait.

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The US imposed the export curbs on Friday, and it has been indicated that similar measures may be implemented in other nations to ensure global cooperation. The news triggered a 9% drop in the Philadelphia Stock Exchange Semiconductor Index over the next two days, with the index closing Monday at its lowest level since November 2020. That day, markets in Korea, Japan, and Taiwan were closed for holidays.

Samsung dropped up to 3.9%, the biggest in a year. SK Hynix Inc. of South Korea, one of the world’s leading memory chip manufacturers with operations in China saw its stock drop 3.5% before recovering.

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Since Thursday’s close, the latest downturn has already wiped away more than $240 billion from chip stocks globally, according to statistics compiled by Bloomberg.

The curbs are a “big setback to China” and “bad news” for global semiconductors, Nomura Holdings Inc. analyst David Wong wrote in a note Monday. China’s localization efforts may also be “at risk as it may not be able to use advanced foundries in Taiwan and Korea,” he wrote.

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Shares of Chinese chipmakers fell further on Tuesday, with Morgan Stanley warning that tighter restrictions on supercomputers and foreign capital investment in China could be “disruptive.”

In recent days, Chinese state media and authorities have responded to Biden’s stance, warning of economic implications and stoking speculation about future retaliation.

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The restrictions are intended to hamper China’s efforts to create its own semiconductor industry and boost its military capabilities. They include curbs on the export of certain types of chips used in artificial intelligence and supercomputing, as well as tighter restrictions on the selling of semiconductor manufacturing equipment to any Chinese company.

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The US is aiming to ensure that Chinese companies do not pass technology to the country’s military and that Chinese chipmakers do not develop the capability of producing advanced semiconductors themselves.