According to an 8-K filing by Nvidia on Tuesday, the US government informed the company that it needs to obtain an export license from them to sell advanced chips to the Chinese market. This policy is expected to result in an additional $5.5 billion in costs in the first quarter. This new move by the Trump administration impacts not only Nvidia but also puts significant financial pressure on another semiconductor giant, AMD. AMD stated on Wednesday that due to the new restrictions, they expect to record up to $800 million in charges related to inventory, procurement commitments, and reserves, in line with the expense items listed by Nvidia.
A spokesperson from the US Commerce Department also confirmed that the White House will issue new chip export licensing requirements, involving several advanced chips including Nvidia's H20 chip and AMD's MI308 and similar products. China is AMD's second-largest market, contributing over $6.2 billion in sales last year, accounting for more than 24% of total sales, making the new export restrictions particularly consequential for AMD.
Additionally, Intel has also issued a notice requiring US government approval for the sale of some of its advanced AI processors to China, involving products such as the Gaudi series. Although AMD stated they will apply for US government export licenses, they cannot guarantee approval.
The introduction of these restrictions led to a broad decline in US chip stocks on Wednesday. AMD and ASML shares fell more than 7%, Nvidia fell over 6%, and TSMC and Intel also each fell more than 3%. The Philadelphia Semiconductor Index overall dropped by 4.1%.
The Trump administration's constantly evolving trade policies are complicating the outlook for the semiconductor industry, particularly affecting the operations of giants like Nvidia and AMD, creating greater uncertainty. Chip equipment manufacturer ASML also warned that US government tariff policies are impacting global chip demand and may suppress growth in the AI sector.
These policy changes bring more complex geopolitical risks to the tech and semiconductor industries, especially under the influence of the Trump administration, forcing companies and investors to face greater uncertainty.
