Two Presidents tag-team the Semis

Bloomberg news reported overnight that the Biden Administration is informing allies that another step in the increased crackdown on high technology made available to China is under consideration. The US is currently weighing whether or not to impose what is known as the "foreign direct product rule" or "FDPR" which would restrict foreign-manufactured products that make use of even the smallest bit of American technology. The companies that such a rule would seem to impact the most awould be Japan's Tokyo Electron (TOELY) $Tokyo Electron (ADR) (TOELY.US)$ and the Netherlands' ASML Holding (ASML) $ASML Holding (ASML.US)$ . Bloomberg reports that the US is already in the process of making officials in Tokyo and the Hague aware that the implementation of this rule is a somewhat more than likely outcome if these countries do not tighten their own restrictions against China's acquisition of high-end technology on their own. This would hamper the ability to sell, service and repair equipment already in China. China, through Foreign Ministry spokesperson Lin Jian, expressed concern that the US has "politicized trade and the concept of national security" while encouraging potentially impacted nations such as those already mentioned to "resist coercion." There is talk that some US allies are considering trying to outlast the Biden administration. US chip companies are said to be pushing an alternative to imposing the FDPR rule, where the criteria for the current "unverified list" would be expanded, requiring firms using American technology to seek licenses in order to ship restricted technologies.

Back to the present, in the Bloomberg interview, former President Trump said... "They took almost 100 percent of our chip industry; I give them credit... Now, we're giving them billions of dollars to build new chips in our country, and then they're going to... bring it back to their country." Trump is referring to the TSMC (Taiwan Semiconductor) $Taiwan Semiconductor (TSM.US)$ plan to invest $65B in Arizona, to build three wafer fab plants here. In return, the US will provide up to $6.6B in grants and another $5B in loans from the CHIPs and Science Act. Taiwan, to be clear, does fill almost all of its defense and security needs through government negotiated foreign military sales from US defense contractors and is one of the largest markets for these providers. At this early hour, I see TSM down 3.5% followed by many US tech and semiconductors stocks. Lockheed Martin (LMT) $Lockheed Martin (LMT.US)$ is currently sticking out like a "green" thumb.