Impact of US artificial intelligence (ai) chip export restrictions on the performance of southeast asian technology stocks

Kong, Xiang Ying (2025) Impact of US artificial intelligence (ai) chip export restrictions on the performance of southeast asian technology stocks. Final Year Project, UTAR.

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Abstract

The U.S. AI chip export restrictions represent a significant geopolitical policy shift with major but asymmetric implications for the United States and ASEAN nations, fundamentally affecting their respective positions within global semiconductor supply chains and financial markets. While prior research has examined broad trade shocks, a critical gap exists in understanding the specific impact of these technologically targeted controls on Southeast Asian technology firms. This study addresses this gap by investigating the impact of the stock market reactions of semiconductor firms in Malaysia, Singapore, and the United States to the restriction announcement on 13 January 2025. The sample consists of 68 firms, 30 from the U.S., 28 from Malaysia, and 10 from Singapore, covering the period from 27 December 2024 to 27 January 2025. Event study methodology with cumulative abnormal returns (CARs), volatility of daily stock prices, and trading volume as the performance metrics. Statistical tests applied include one-sample and paired samples t-tests, Wilcoxon signed-rank tests, one-way ANOVA, Kruskal-Wallis tests, and multiple regression analyses. The findings show that (1) Malaysia shows significantly positive PRE CARs, indicating anticipated favourable effects, while Singapore records significantly negative PRE CARs, reflecting expected adverse impacts. U.S. firms exhibit significantly positive CARs, suggesting investor optimism; and (2) U.S. technology stocks show the strongest positive CAR, reflecting earlier investor access to policy signals, while Malaysian and Singaporean investors react later due to weaker information linkages and reliance on international news; and (3) the significantly negative coefficients for the country dummies and restriction tier indicate that U.S. technology export controls, especially at higher severity levels, adversely affect the stock performance of Malaysian and Singaporean technology firms. This study provides valuable insights for investors and portfolio managers managing regional risk and for policymakers in navigating the complex interplay between technological trade restrictions and financial market stability.

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