China's regulatory agency is launching an investigation into automobile chip distributors, citing suspicion of price gouging, and triggering a slump in the once-secure semiconductor stocks.
The State Administration for Market Regulation said the firms were suspected of driving up prices, based on price monitoring and reporting clues.
It vowed to investigate and punish illegal acts such as hoarding, price-gouging and collusion.
The global chips shortage has hit China's auto industry hard, with June car sales down 12.6 percent over May.
Solomon Systech (2878) and Semiconductor Manufacturing International (0981) fell nearly 6 percent on the news and were the worst performers among chip stocks. Hua Hong Semiconductor (1347) also lost 5 percent and ASM Pacific (0522) fell 2 percent.
