Chip stocks fall as U.S. moves to close loopholes in effort to curb AI chip exports to China
Chip stocks like NVIDIA (NASDAQ:NVDA), AMD (NASDAQ:AMD), and Intel (NASDAQ:INTC) fell in early trading Tuesday after new rules from the Biden administration will make it harder for China to buy AI and other advanced U.S. chips.
The objective of the move is to address apparent weaknesses in export controls that were introduced a year ago. These controls had previously encountered significant resistance from the global semiconductor industry and heightened tensions with Beijing.
The new rules will further restrict China's “access to advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers," Commerce Secretary Gina Raimondo told reporters.
The Semiconductor Industry Association, a U.S. chip industry association, strongly criticized the regulations in a statement. The group expressed concerns that these overly broad, unilateral controls could potentially damage the U.S. semiconductor ecosystem and might not effectively enhance national security, as they could lead foreign customers to seek alternative sources.
NVIDIA said it doesn't expect the new curbs to impact near-term financial results.
«We comply with all applicable regulations while working to provide products that support thousands of applications across many different industries,» NVIDIA said in a statement. «Given the demand worldwide for our products, we don’t expect a near-term meaningful impact on our financial results.»
NVIDIA is down 5.8%, AMD is down 3.8%, and Intel is down 2.6% as markets open.
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