Global chip stocks took a sharp hit on Wednesday following fresh U.S. export restrictions that have clouded the outlook for semiconductor giants, including Nvidia and AMD. These curbs, reflective of Trump-era trade tactics, particularly target the AI chip trade with China, prompting Nvidia to forecast a $5.5 billion revenue hit and AMD to warn of an $800 million impact.
The restrictions blocked the export of Nvidia’s H20 processor and AMD’s MI308 chip to China, signaling a major blow to the AI chip sector after its two-year rally. Nvidia shares slid nearly 6%, erasing over $148 billion in market value. AMD dropped 5.8%, while other AI-related chip stocks like Arm, Broadcom, and Micron saw losses ranging from 2.5% to 4.6%.
Analysts say the mounting trade uncertainty is unsettling both markets and investors. Nvidia, which earned over $17 billion from China last fiscal year, is now under pressure, with analysts noting the H20 ban could push China toward domestic alternatives like Huawei. AMD, for its part, saw China account for over 24% of its sales in 2023.
Though Trump has temporarily exempted chips from new tariffs, he warned that targeted levies are coming, potentially costing U.S. chip equipment makers more than $1 billion annually. Nvidia recently unveiled a $500 billion AI server investment plan in the U.S., seemingly aimed at staying in Washington’s good graces, but that has not deterred the policy shifts.
The fallout was felt globally. South Korea’s Samsung and SK Hynix dropped 3% and 4% respectively, while European firms ASM International and Infineon lost over 2%. Japan’s Advantest, a key Nvidia supplier, plunged 5%, becoming one of Nikkei’s worst performers.
Source: Swifteradio.com
