CFRA Research analysts told investors in a note Friday that the firm sees a greater probability of US restrictions on semiconductors going into China.
Semiconductor stocks are declining after the launch of Huawei's Mate 60 Pro, which has raised concerns about the need for more chip restrictions as tensions between the US and China grow, they explained.
"While details of the device components are limited, we question whether the SMIC/Huawei relationship violated U.S. sanctions given the performance/capabilities the device has obtained," they wrote.
"We now see a greater than 50% probability that the U.S. will look to implement greater chip restrictions on the two firms, at the very least (likely extending beyond), with companies exposed to the smartphone ecosystem most at risk," including Qualcomm (NASDAQ:QCOM), Qorvo (NASDAQ:QRVO), Skyworks Solutions (NASDAQ:SWKS).
The analysts believe Intel (NASDAQ:INTC) could be viewed as a perceived beneficiary due to its foundry expansion plans and greater manufacturing penetration "with an emphasis into Western markets."