US tech stocks experienced a significant downturn following the announcement of new US export restrictions on advanced AI chips destined for China, coupled with escalating trade tensions. The Nasdaq Composite fell by 1.8% and the S&P 500 declined by 0.9% as investors reacted to the latest trade policies.
Semiconductor giants Nvidia and Advanced Micro Devices (AMD) were particularly affected. AMD revealed it anticipates an $800 million charge due to the new licensing requirements for AI chip sales to China, specifically impacting its MI308 product line. AMD’s shares subsequently dropped by 6.1%. Nvidia disclosed a projected $5.5 billion revenue loss due to indefinite licensing requirements for its H20 chips, which previously generated a substantial portion of its China revenue. Nvidia’s stock also fell by 6.3%.
The export restrictions are part of the Trump administration’s broader strategy to limit China’s technological advancements. This is compounded by the announcement of potential additional tariffs, including levies on imports from Mexico and Canada, and a significant increase in tariffs on Chinese imports.
The market reaction extended beyond Nvidia and AMD, with companies like Broadcom and Marvell Technology also seeing their stocks decline. Even major players like Apple and Amazon experienced slight dips in their share prices.
The impact of these US policies is being felt globally, as Asian semiconductor firms including Samsung, SK Hynix, and TSMC also reported stock declines, indicating concerns about disruptions to the global tech supply chain.
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