Core Viewpoint - The US House committee has raised concerns that semiconductor companies are inadvertently supporting China's semiconductor industry and military, leading to fears of increased export controls [1][4][5]. Group 1: Company Reactions - Semiconductor companies such as ASML, Applied Materials, Tokyo Electron, KLA, and Lam Research experienced significant stock declines following the committee's statements, with ASML dropping as much as 7.1% in Amsterdam [3][4]. - The committee's report indicated that these companies have made substantial profits from selling equipment to Chinese state-owned and military-linked firms, although no legal violations were claimed [2][6]. Group 2: Government Actions and Industry Impact - The committee has urged the US government to expand export bans and licensing requirements for tool exports to China, although it lacks the authority to enforce these measures [4]. - The semiconductor industry has been increasingly targeted amid rising US-China tensions, with recent actions including the revocation of authorizations that previously allowed certain companies to supply Chinese factories without prior approval [5][6]. Group 3: National Security Concerns - The committee expressed that China's advancements in chip manufacturing pose threats to US national security, accusing toolmakers of facilitating the production of chips for the Chinese military [6]. - ASML, as the sole producer of advanced lithography machines essential for high-end chip production, has faced restrictions preventing it from selling its most advanced machines to China due to US-led export controls [7].

Investment Rating - The industry investment rating is cautious [3][25]. Core Insights - The US government has implemented new licensing requirements for H20 product shipments to China, impacting NVIDIA with potential charges of up to US$5.5 billion in the April quarter [1]. - The US semiconductor team has revised down NVIDIA's datacenter revenue by approximately US$5.9 billion for the April to October quarter, indicating a 2% downside on HBM Total Addressable Market (TAM) estimates [1]. - Each H20 product utilizes 96GB HBM3 at an average selling price (ASP) of US$1.4/Gb, leading to an estimated revenue impact of around US$490 million on HBM suppliers in the upcoming quarters [1]. Summary by Relevant Sections Industry Overview - The report highlights the cautious outlook for the South Korean technology sector, particularly in memory products due to regulatory changes affecting supply chains [3][25]. Company Ratings - The report includes various company ratings within the South Korean technology sector, with notable mentions such as: - Samsung Electronics rated as Overweight [53] - SK hynix rated as Equal-weight [53] - LG Display rated as Underweight [53]