The controls also barred U.S. citizens or entities from working with Chinese chipmakers without explicit approval and limited the export of manufacturing tools that would allow China to develop its equipment, the Financial Times reports.

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The U.S. commerce department had added 31 companies to its “unverified list” to make it more difficult for Chinese companies to manufacture or obtain advanced computer chips vital to cutting-edge technologies.

A Hong Kong analyst acknowledged that the restrictions affected overall sentiment in the market and are not likely to ease up. The restrictions had already sent the Philadelphia Stock Exchange Semiconductor index down as analysts warned against Chinese chip producers taking a substantial hit from the new limits.

Traders said the restrictions would likely hit big suppliers across the rest of the Asia-Pacific region.

Taiwan has its own concerns about China, especially efforts by Chinese companies to poach chip talent and technical know-how. The government tightly restricts Taiwanese chip investment in China, the island’s largest trading partner.

Taiwan’s worries have gained pace as China mounts regular military drills near the island.

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