Type to search

Chipmakers Shares Drop on Report of New US Chip Bans to China

Shares of top chip designer Nvidia, plus AMD and other chipmakers have fallen after a report that the US may impose tougher curbs on exports of artificial intelligence chips to China

China's flag is seen with a computer chip
China's flag is seen with a computer chip in this Reuters image.


Shares of top chip design firm Nvidia, plus chipmakers Advanced Micro Devices, Intel and others have fallen after a report that the US plans to impose tougher chip curbs on China.

The Wall Street Journal reported on Tuesday that the Biden Administration is contemplating new restrictions on exports of artificial intelligence chips to customers in China as early as July, citing sources.

The news caused shares of Nvidia to drop by 4% in premarket trading on Wednesday while Advanced Micro Devices (AMD) fell 3.3%.

Marvell Technology, Applied Materials, Intel, Microchip Technology also fell between 1.1% and 3% on Wednesday, while futures tracking the tech-heavy Nasdaq 100 edged 0.5% lower.


ALSO SEE: Banned Nvidia Chips Available in China’s Underground Markets


“With an update on export controls now expected, investors will assess just how limiting the new rules will be for chip makers’ sales,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.

“A handful of tech companies pack a huge punch on Wall Street due to their sheer size, so any wobble in confidence reverberates on indices.”


Nvidia in the spotlight again

The new restrictions being considered by the Commerce Department would include a ban on the sale of Nvidia’s advanced A800 chip without a special US export licence.

Rising expectations over the advancements in AI has helped Wall Street gains this year, with Nvidia in the pole position on the S&P 500 index with its 187% jump so far this year.

But the sharp rise in shares have also sparked doubts over lofty valuations.

Nvidia is trading at 47 times its expected 12-months earnings, while AMD is at a 31.2 multiple and Intel at 31.8, way above the S&P 500’s multiple at 19, according to Refinitiv data.

The Philadelphia chip index has surged more than 44% so far this year, far ahead of the benchmark index’s 14% rise.

Among other chip stocks, Marvell Technology, Applied Materials, Intel, Microchip Technology fell between 1.1% and 3% on Wednesday.

Across the Atlantic, Nordic Semiconductor, Dutch chipmaker ASML, Milan-listed STMicroelectronics, however, gained between 1.2% and 2%.

Micron and AMD are among the other US chipmakers caught in the crossfire between China and the Biden administration.

In September, Nvidia had said that US officials asked the company to stop exporting two top computing chips for artificial intelligence work to China.

Months later, Jensen Huang-led Nvidia said it will offer a new advanced chip called the A800 in China to meet export control rules. The company also tweaked its flagship H100 chip early this year to comply with regulations.

The Commerce Department did not immediately respond to a Reuters request for comment.


  • Reuters with additional editing by Jim Pollard


NOTE: This report was updated with further details on June 28, 2023.




US to Target Investment in China Chips, AI, Quantum Computing


US Chip Sanctions Have Hardly Impacted China’s AI Capability


TSMC Seeks up to $15 Billion in US CHIPS Act Subsidies


Nvidia Tweaks Another Flagship AI Chip for Export to China


US Orders Nvidia to Stop Sale of Advanced Chips to China



Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


AF China Bond