China metals export curbs lift shares in US producer MP Materials (updated)

Navitas Semiconductor

05/07/2023 18:50

(Adds more background, share reactions of U.S. chipmakers to
China curbs, paragraphs 6-10)
    By Chibuike Oguh
       NEW YORK, July 5 (Reuters) - Shares in U.S. rare earth
materials firm MP Materials Corp  MP.N  surged more than 11% on
Wednesday following China's announcement of restrictions on
exports of some gallium and germanium products - minor metals
used in semiconductors and electric vehicles.
    China's commerce ministry said on Monday the curbs would
take effect from Aug. 1, saying the step was aimed at protecting
national security interests.
    There are growing concerns the restrictions could spread to
rare earth metals in which China accounts for nearly two-thirds
of world mine production.
    Las Vegas-based MP Materials mines rare earth oxides at the
Mountain Pass mine in California although it still ships them to
China for final processing.
    MP Materials declined to comment. 
    Its stock was last up 6.8% on the day at $24.73, having hit
a high of $25.78 earlier. It was on course for its biggest
one-day percentage gain in roughly four months.
    The shares of Navitas Semiconductor Corp  NVTS.O  were 3%
higher. Navitas does not anticipate any impact on customer
deliveries from China's restrictions given that its chips use
gallium, which can be obtained from multiple sources as it is a
by-product of other metals including aluminum, a company
spokesperson said in a statement.
    "Navitas does not expect customer deliveries to be impacted
or its business to be adversely affected by the export
restrictions," the statement said.
    China's restrictions could directly impact several U.S. and
European chipmakers whose products rely on gallium nitride,
Wells Fargo analyst Gary Mobley said in an investor note. Mobley
pointed to Wolfspeed Inc  WOLF.N , Qorvo Inc  QRVO.O , Skyworks
Solutions  SWKS.O  and Qualcomm  QCOM.O  among firms that may
experience constraints.
    Semiconductor stocks were trading mostly lower on Wednesday,
with the Philadelphia SE Semiconductor index  .SOX  down 1.7%.
Qualcomm shares were off about 2%, while the U.S.-listed shares
of NXP Semiconductors NV  NXPI.O  lost 1.3%. Lumentum Holdings
Inc's  LITE.O  stock fell 4.5%.
    Wolfspeed bucked the trend as its shares soared more than
15% after it announced on Wednesday that it secured a $2 billion
deposit from signing a 10-year agreement to supply silicon
carbide wafers to Renesas Electronics Corp  6723.T . Wolfspeed
shares were last up 13% at $64.27 on the day.
    

 (Reporting by Chibuike Oguh; additional reporting by Jaspreet
Singh and Ernest Scheyder. Editing by Helen Popper, Lance Tupper
and Emelia Sithole-Matarise)
 ((chibuike.oguh@thomsonreuters.com))