Chipmakers faced a sharp selloff on Wednesday as Nvidia shares dropped 5%, leading the tech sector lower. The fall came after both Nvidia and AMD disclosed that new U.S. export restrictions on chips to China could cost them heavily.
Nvidia reported a $5.5 billion charge related to export limitations on its H20 graphics processing units chips made during President Joe Biden’s term to comply with U.S. rules. These rules stop advanced AI chips from being sold in China, a market estimated at $12 billion to $15 billion in 2024. AMD also said the new restrictions could result in a hit of up to $800 million on its MI308 chips.
Global Semiconductor Market Feels the Shock
The impact of Donald Trump’s tough trade stance on China is beginning to show, with concerns growing over its potential effects on chip demand and industry growth. Although some electronics have temporary exemptions, the administration has hinted that more tariffs may be imposed in the future.
To make matters worse, Dutch chip equipment maker ASML reported disappointing orders and blamed trade uncertainty. Its shares fell 5%, adding pressure on the global chip sector.
The VanEck Semiconductor ETF dropped over 4%, while AMD plunged more than 5%. Micron Technology, Marvell Technology and Broadcom each fell by about 2%, and equipment firms Applied Materials and Lam Research lost close to 3%.
Tech Stocks Swing as Tariff Fears Grow
The damage wasn’t limited to chips. The Nasdaq Composite slipped nearly 2%. Big tech names like Meta Platforms, Alphabet and Tesla each fell around 2%. Amazon, Microsoft and Apple slid about 1% each.
Markets have been shaky ever since Trump’s tariff plans sparked fears of a trade war and recession. In just two days, the “Magnificent Seven” tech stocks lost over $1.8 trillion in value.
Although a 90-day pause on most reciprocal tariffs helped the Nasdaq rebound with its second-best session ever, uncertainty continues. This month, Apple and Meta are still down over 10%, Amazon is off 7%, and both Nvidia and Tesla have lost more than 3%.
