Escalating US-China Trade War to Hurt These Stocks in 2025

Core Viewpoint - The escalation of U.S.-China trade tensions is expected to significantly impact the global semiconductor industry in 2025, despite a notable increase in global semiconductor sales in 2024 [1][2]. Group 1: Industry Overview - Global semiconductor sales increased by 23.2% year-over-year to $166 billion in Q3 2024 [1]. - Proposed tariffs of up to 60% on Chinese imports could lead to a 2.8% decline in S&P 500 earnings, particularly affecting technology and manufacturing sectors [2]. Group 2: Company-Specific Risks - Qualcomm faces acute risks due to its heavy reliance on the Chinese smartphone market and potential competition from domestic players [5]. - AMD's growth in data centers and AI initiatives may be jeopardized by stricter export controls to China, impacting revenue projections [6]. - Intel's expansion plans could be complicated by increased restrictions on semiconductor manufacturing equipment sales to China, affecting its market share recovery efforts [17]. - Micron Technology is particularly vulnerable due to its reliance on Chinese demand for memory products, with recent government actions indicating potential trade disputes [19]. - ASML, as a leading supplier of semiconductor lithography equipment, may face challenges in selling to Chinese customers under expanded export controls [9]. Group 3: Geopolitical Context - The current situation is more precarious than the 2018 trade war, with China enacting laws that could blacklist foreign companies and restrict access to critical supply chains [11]. - China controls over 70% of essential raw materials for semiconductor production, creating significant vulnerabilities for the industry [11]. Group 4: Future Outlook - Semiconductor companies must navigate a complex landscape influenced by geopolitical considerations, focusing on diversifying supply chains and maintaining technological leadership [10]. - The shift of Chinese customers towards domestic alternatives may necessitate accelerated technology development and exploration of new growth markets [23].