8 S&P 500 Companies Exposed to China-US Tech War - And 1 Set to Benefit From It

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The know-how struggle between the USA and China, with the Netherlands and Japan concerned, is ready to accentuate additional.
We’ll know that are the 8 firms on S&P 500 that may be harm probably the most by having a larger publicity of their earnings in China.
Intel seems to be one of many firms that would really profit from this battle.

There is not any query that we’re within the midst of a technological tug-of-war, a battle the place the heavyweight contenders are none aside from the USA and China. This tussle extends into the realm of cutting-edge microchips, given their paramount strategic significance.

Over time, the USA has carved out a pioneering function within the semiconductor sector. Nevertheless, it is value highlighting that just about 90% of the superior chips crafted by NVIDIA (NASDAQ:) and Broadcom (NASDAQ:) originate from Taiwan, a territory that China lays declare to.

This intricate element provides layers to the battle, transcending mere technological rivalry, and from China’s perspective, it carries a two-fold interpretation:

It is a bid to forestall the USA from eroding the technological supremacy of the Asian powerhouse.
It serves as a blow to China’s proclaimed sovereignty.

For now, all eyes are laser-focused on the upcoming elections set for January 13, 2024, in Taiwan. The potential for a peaceable decision to the standoff between the island nation and mainland China hinges on the end result of those pivotal elections.

Whereas the U.S. might have believed it had a agency grip on the scenario, latest occasions have proven in any other case. This previous summer season, China’s Huawei unveiled a smartphone flaunting a remarkably superior chip, underscoring China’s persistent risk to the USA.

This growth might immediate a ramping up of sure White Home measures, together with the tightening of export restrictions, inevitably placing downward stress on sector firms’ income and additional stoking the flames of this battle.

Whereas it is true that U.S. embargoes purpose to impede China’s manufacturing of superior chips, China has countered by saying plans to assemble 4 new services, successfully tripling its manufacturing capability.

The overarching U.S. goal is to thwart China’s skill to fabricate its built-in circuits within the brief and medium time period, given their immense significance within the navy sector and the realm of synthetic intelligence. And let’s not overlook, chips counting on outdated integration applied sciences are omnipresent, serving important roles in cars, family home equipment, and on a regular basis gadgets.

But, China is not simply dealing with off in opposition to U.S. measures.

The Netherlands has imposed constraints on the sale of essential equipment utilized in semiconductor manufacturing. This carries important weight, particularly because the Netherlands is house to ASML (NASDAQ:), the world’s largest producer of such equipment. Japan has additionally thrown its hat into the ring, instituting a ban on semiconductor exports in an effort to curb China’s technological development.

Undoubtedly, this battle will ship shockwaves into different sectors.

By the best way, Mexico has change into a prized gateway for U.S. firms trying to cut back their dependence on China by way of nearshoring. The newest heavyweight to make a transfer is Tesla (NASDAQ:).

Which Shares Are the Most Uncovered to This Battle?

Towards this backdrop, let’s assess which S&P 500-listed firms are more than likely to really feel the warmth on this tech struggle and which might even profit from it.

Many suppose that Apple (NASDAQ:) can be the worst hit, however in actuality this isn’t the case, as its revenues by way of China account for less than 18.8% of the entire, a a lot decrease share in comparison with different tech gamers, notably those within the semiconductor trade.

Under you may see the listing of firms listed on the S&P 500 which have probably the most publicity to China adopted by the share of their earnings that come from the Asian big:

Qualcomm (NASDAQ:) 63.5%.
Monolithic Energy (NASDAQ:) Techniques 52%
Texas Devices (NASDAQ:) 49%
NXP Semiconductors (NASDAQ:)
Broadcom 35%
Viatris (NASDAQ:) 33%
Albemarle (NYSE:) 33%
Corning (NYSE:) 30%

Who Might Profit From It?

On the flip aspect, Intel Company (NASDAQ:) emerges as an organization poised to probably reap advantages from this know-how struggle in the long run because it ramps up its dedication to determine a stronger presence in chip manufacturing services inside the USA, with ongoing expansions in progress.