Asian tech stocks have finally bounced back on Monday as a result of a surprising move from the U.S. government. The friction between the U.S and China trade was set to affect the sales of popular electronics like smartphones, computers, and laptops, which mostly come from China.

The decision to exempt tariffs has brought a sigh of relief and helped to move the stocks upward.

Apple Suppliers Lead Market on Tariff Relief

According to Reuters, Apple’s key suppliers had a strong day in the market.

  • Faxconn (2317.TW) initially surged up to 7.8% and then fell back to close up to 3%.
  • Quanta (2382.TW) had a strong gain of 5.8%
  • Inventec (2356.TW) wasn’t far behind, and its share rose up to 4.1%.
  • In China, both Gortek (002241.SZ) and Lens Tech (300433.SZ) experienced a spike of 7% before easing back.
  • Samsung Electronics (005930.KS) in South Korea, which ranked no.2 in the U.S’s smartphone sales, saw a rise in its share by 2%.

Trump’s decision to exclude some electronics from the tariff gave some time to the tech industry to breathe.  But, don’t get too comfortable yet. Trump made it clear that these items are not off the hook yet and are just moved to another tariff category and will be investigated under national security trade review for semiconductors.

However, Commerce Secretary Howard Lutnick claimed that these exemptions are temporary and a part of a strategy to support U.S manufacturing. He mentioned that critical sectors like pharmaceuticals and semiconductors are still in the spotlight and will face new tariffs soon.

Industry Reactions and Uncertainty Felt by Chipmakers

The tech industry is not exactly celebrating this glee. Renaud Ajoran from an electronic firm in China called the whole thing “exhausting”. And he is not to blame. According to him, customers are in panic and they don’t know what to do next.  

Moreover, one anonymous executive in Taiwan is not being optimistic. Off the record, he hinted that exemptions might not be real and dismissed them as “just talk”.

Even though there was a positive reaction overall, some chipmakers have faced a decline.

  • World’s largest chipmaker, TSMC (2330.TW), Fell by 2.7% even after having an initial rise.
  • Whereas Sky Hynix (000660.KS), a memory chipmaker, had a drop of 0.5%.

Meanwhile, the semiconductor sector is under pressure as Trump announced that he will soon set a new tariff on imported semiconductors, though he hinted at flexibility for certain firms.