Semiconductor Stocks in Focus on China Tariff Delay

Yesterday, the US Trade Representative stated in a press release that the US would delay its tariff increase on certain imported goods from China (MCHI) (FXI). Earlier, President Donald Trump had threatened to impose a 10% tariff on the remaining $300 billion worth of Chinese imports starting in September. However, the tariff hike is now delayed until December 15.

The goods in the list include laptops, cell phones, video game consoles, toys, computer monitors, and specific footwear and apparel. Some of the products have been removed from the tariff list for safety and other reasons.

Who benefits from the China tariff delay?

The recent delay in the tariffs has sent a wave of optimism throughout the tech sector—especially the semiconductor industry. All three major indexes spiked yesterday on the tariff delay news. The Dow Jones Industrial Average rose 1.44%, while the S&P 500 jumped nearly 1.5%. The tech-driven Nasdaq Composite climbed 1.95% on the day.

Apple (AAPL) stock, which has fallen 1.5% in August as of yesterday, gained 4.23% on August 13. Apple designs products such as the iPhone in the US (SPY) but assembles them in China. Last month, Apple decided to move some of its production out of China, but the process might take some time. The delay in the China tariffs has relieved Apple investors for at least a little while. Apple’s suppliers, including Skyworks Solutions (SWKS) and Qorvo (QRVO), also celebrated with gains of 2.83% and 3.33%, respectively, on August 13.

US chip makers Qualcomm (QCOM) and Western Digital (WDC) gained 3.41% and 2.64%, respectively. Semiconductor giants Intel (INTC), Micron Technology (MU), and NVIDIA (NVDA) also jumped 2.72%, 4.84%, and 3.04%, respectively, on the tariff delay.

Semiconductor companies are more sensitive to the trade war because they have high exposure to China. According to Morgan Stanley

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