Hong Kong stocks ended the morning more than three percent lower on Friday as tech firms tanked after a US official said a major Chinese chip manufacturer "potentially" broke American law by making a processor for sanctioned telecom giant Huawei.

The Hang Seng Index went into the break 3.04 percent, or 512.54 points, lower at 16,350.56.

The chipmaker in question, Semiconductor Manufacturing International Corp, tumbled more than five percent, while other tech giants including JD.com, Tencent and Meituan were also sharply lower.

There were also hefty losses among developers on concerns about their upcoming earnings reports as the Chinese property market continues to struggle under the weight of colossal debts.

Evergrande Property Services shed almost five percent and New World Development fell 5.4 percent, while Country Garden gave up 1.9 percent.

US Under Secretary of Commerce for Industry and Security Alan Estevez made the remark to lawmakers after being asked whether the firm broke export rules to make the chip to go in Huawei's Mate 60 handset.

Huawei has for several years been at the centre of an intense tech standoff between China and the United States, with Washington warning its equipment could be used for state espionage, an allegation the company denies.

Washington has cited national security concerns to limit the activities of some Chinese companies in the United States, as well as the export of certain technologies to China that it deems sensitive.

-- Bloomberg News contributed to this story --