Lenovo shares pummelled in Hong Kong after microchip report

HONG KONG: China’s Lenovo led a sharp tech sell- off in Asia yesterday after a report said Beijing had used microchips inserted in US computer goods as part of a drive to steal technology secrets.

Bloomberg News said the tiny chips were place in gadgets made for Amazon and Apple, and possibly for other companies and government agencies.

The article comes as China- US relations are strained by a long-running trade war, claims of intellectual property theft by Beijing and an accusation China is trying to sway upcoming elections.

The chip story “plays heavily into the view that the Sino- US trade stoush is not just about Trump’s infatuation with the size of the US- China bilateral trade balance”, said Ray Attrill, head of foreign exchange strategy at the National Australia Bank.

“But is a much more geopolitical affair as well as being related to China’s desire to dominate the technology sphere.

It means that an early resolution of Sino- US trade issued is not a realistic prospect.”

The sell- off comes as tech firms around the world struggle on profit-taking following a healthy rally in recent years, while chip makers are also being hurt by falling demand.

In morning Hong Kong trade PC maker Lenovo tanked more than 17 per cent, while mainland-based telecoms equipment maker ZTE plunged 11.4 per cent.

AAC Technologies a Hong Kong firm listed in the city, sank almost two per cent, while in Taipei HTC sank 3.6 per cent, Realtek was almost seven per cent off and Delta Electronics retreated 4.5 per cent. — AFP