FRANKFURT/PARIS/AMSTERDAM (dpa-AFX) - Fears of falling demand from China weighed on shares in the chip industry on Friday, in some cases significantly. The Bloomberg news agency reported, citing people familiar with the matter, that the Chinese government is encouraging domestic electric car manufacturers such as BYD and Geely to buy significantly more electronic chips from Chinese suppliers. This is intended to strengthen China's semiconductor industry and reduce dependence on Western supplies.

In Germany, Infineon shares recently slumped by almost six percent to 31.94 euros, falling to the level seen at the beginning of February. This made them one of the weakest stocks in the DAX. The leading German index rose slightly and thus remained at a record level. The shares of chip industry equipment supplier Aixtron fell by a good three percent in the MDax, an index of mid-cap stocks with little movement.

STMicroelectronics shares brought up the rear in Paris' leading index, the Cac 40, losing more than 3 percent. In Amsterdam, plant manufacturer ASM International fell by 1.5 percent.

A technology dispute has been raging between China and the USA in particular for some time. The USA recently tightened restrictions on chip deliveries to China in the competition for the development of artificial intelligence. There are also export bans to China on certain systems for the production of particularly powerful chips.

China's role as the largest market for electric vehicles is of central importance for European chip manufacturers such as Infineon or STMicro, as they generate considerable sales there with several products, wrote analyst Sandeep Deshpande from US bank JPMorgan. The risk posed by local Chinese competition is a key debate for Infineon and STMicro. However, the companies have recently allayed investors' concerns by saying that overall growth will offset some of the negative impact from the Chinese business.

Analyst Andrew Gardiner from the US bank Citigroup wrote on Infineon that demand had not deteriorated recently. However, signs of an improvement have recently evaporated. In view of the sluggish chip cycle, the expert expects Infineon's expansion to take some time./la/mis/jha/