These 6 semiconductor companies will feel the pinch of China's rare earth limits

investing.com:

China stated this week that it will put limits on the exportation of two rare metals widely used in producing semiconductors, in a move that will impact some U.S.-listed companies in the sector.

Chinese state-run publication, the Global Times, said the move to control exports of gallium and germanium products from August 1 is a warning that the country will not be squeezed out of the global supply chain, making the move to escalate the ongoing tussle regarding semiconductor chips between the two countries.

Here are six companies that will feel the pinch from China's rare earth limits:

Microchip Technology (NASDAQ:MCHP): The company develops compound semiconductor products that utilize some blend of gallium and germanium, Wells Fargo analysts said in a note Wednesday. However, it makes up a small percentage of the company's revenue. The news impacted the stock on Wednesday, currently down over 2%.

NXP Semiconductors (NASDAQ:NXPI): Like MCHP, NXPI also develops products with a blend of both metals, although they too, make up a small amount of its revenue. Nevertheless, investors see potential issues for the company, with the stock down over 1% Wednesday.

Qorvo (NASDAQ:QRVO): Greensboro, North Carolina-headquartered Qorvo is one of the companies on the list that buy gallium nitride from suppliers. Wells Fargo said in its note Wednesday that «China export controls may impact directly U.S.-and Euro-based manufacturers of gallium nitride materials (e.g. crystals, wafers) & buyers of these materials.» In addition, the company also specializes in gallium-based products for RF applications.

Skyworks Solutions (NASDAQ:SWKS): While it's not yet entirely clear how the China restrictions will affect chip developers, Skyworks is