Shares in Qualcomm and NXP Semiconductors are both marching higher on Thursday after the US said it has reached a deal with Chinese telecoms group ZTE to unwind crippling sanctions that nearly brought it to the brink of collapse.
The deal would allow ZTE to start importing vital US-made components it needs to make its phones and telecoms equipments and help resolve a case that has been thrust into the middle of the ongoing US-China trade dispute.
Qualcomm is currently awaiting Chinese regulatory approval for its $47bn acquisition of rival NXP and the hope is the reprieve for ZTE would now pave the way for Beijing to give clearance for the deal.
Shares in Qualcomm were 2.2 per cent higher at $61.17 while those for NXP jumped 6.3 per cent to $121.74. Both stocks were pressured this year by concerns over the fate of their proposed merger. Qualcomm had been down by as much as 22 per cent for the year in April after the US hit ZTE with the component supply ban. NXP nursed year to date losses that topped 21 per cent at one point in May.
Taken together, the moves leave the wider Philadelphia Semiconductor index 0.6 per cent lower for the day.
Get alerts on Qualcomm Inc when a new story is published