US-China semiconductor war sparks Alibaba, wiping out $26 trillion in market capitalization (aggregate).

Alibaba logo © AFP=News1

The fallout from the U.S.-China semiconductor war has hit Alibaba, China’s largest e-commerce company.

Alibaba has withdrawn its plan to spin off its cloud division due to difficulties in procuring semiconductors due to U.S. mass semiconductor export sanctions.

As a result, Alibaba’s stock price plunged by more than 9% in the U.S. stock market on the 16th (local time). This caused a market capitalization evaporation of $20 billion (approximately 26 trillion won) in a single day.  

On this day, Alibaba recorded $79.11, a 9.14% plunge from the previous trading day, in the U.S. stock market. Currently, Alibaba’s market capitalization is $201.4 billion.

Alibaba’s daily stock price trend in the U.S. stock market – Yahoo Finance

Also, in the Asian stock market held on the 17th, Alibaba’s stock price is plunging by about 10%. On this day, Alibaba is plunging nearly 10% in the Hong Kong stock market. Accordingly, the Hang Seng Index in Hong Kong is also plummeting by 1.73%.

Alibaba announced at the earnings announcement on the previous day that due to the U.S. semiconductor export restrictions, Chinese companies are having difficulty receiving important chip supplies from U.S. companies, hence the plan to spin off the cloud division has been put on hold.

Originally, Alibaba planned to spin off the cloud division and list it on the stock market. The market had predicted that the market value would be about $11 billion if the cloud division were to go public (IPO).

However, due to the U.S.’s mass semiconductor export restrictions, such plans have gone awry.

Bloomberg in the U.S. assessed that the Biden administration’s attempt to prevent the Chinese government from dedicating advanced chips for military use has begun to unexpectedly affect China’s private sector.

Meanwhile, Alibaba announced earnings that met market expectations in the earnings announcement on the previous day. Alibaba announced that its net profit for the previous quarter was 27.7 billion yuan. This is below the market’s expected 29.7 billion yuan. However, sales exceeded the market’s expectations at 224.79 billion yuan. 

sinopark@news1.kr