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We recently published a list of Buy The Dip On These 10 Semiconductor Stocks Tumbling On China H20 Chip Sale Ban. In this article, we are going to take a look at where ASE Technology Holding Co., Ltd. (NYSE:ASX) stands against other semiconductor stocks tumbling on China H20 chip sale ban.
Semiconductor manufacturers are at the forefront of the technological battle, especially in the context of China’s rapid tech developments. One would have thought President Trump would take it easy on the chipmakers owing to their critical position in the US and global tech infrastructure.
However, investors are now finding out that semi stocks aren’t immune to tariffs, with the latest round of tariffs expected to cost manufacturers around $1 billion. This cost will be incurred through lost sales, increased regulatory compliance, and elevated supply chain costs.
Uncertainty regarding the exact details of the tariffs continues to cause chaos in the market. Chip stocks are sliding as the leading chipmaker, led by Jensen Huang, finds its H20 chips banned from export to China. As the leading chipmaker tries to steer its way out of the crisis, other companies that rely on this giant for business are also trying to figure out what to do.
We decided to take a look at such stocks and see if they offer value. Remember that the H20 chips were made specifically for China, and a ban on selling them is only a temporary headwind, not something that threatens the company’s moat.
To come up with the list of semiconductor stocks worth buying on the China H20 chip sale ban, we considered stocks that are an integral part of the semiconductor supply chain and ranked them by hedge fund interest in their stocks.
A close up of a high-tech chip, intricate details of its single layers visible.
ASE Technology Holding Co., Ltd. (NYSE:ASX)
Number of Hedge Fund Holders: 17
ASE Technology specializes in semiconductor packaging and testing while also offering electronic manufacturing services. Irrespective of the tariff impact, ASX has a crucial place in the semiconductor supply chain. The company’s job is to ensure chips are of the highest standard, so as long as the broader industry continues making chips, ASX will have enough business.
We have already seen this with the company’s Q1 revenue, which is up 6.5% YoY. March revenues were up 13.1% YoY. This is in contrast to the guidance the company gave in February, suggesting things are not as bad as the market suggests. Even though Q1 margins are expected to remain under pressure, this should also recover in the latter half of the year.