The U.S. government is restricting the sale of microchips and semiconductors to China in a
move that ratchets up trade tensions between the two nations.
Trade officials in Washington, D.C. have informed microchip and semiconductor manufacturers
in the U.S. that they must comply with a new license requirement for future exports to China,
including Hong Kong, to reduce the risk that their products may be used by the Chinese military.
News of the new restrictions sent shares of U.S. semiconductor companies such as Nvidia
(NVDA) and Advanced Micro Devices (AMD) down about 5% in extended trading.
Nvidia representatives said that the restrictions would impact its A100 and H100 chips, which
are graphics processing units sold to businesses in China and elsewhere. The company
estimates that it could lose $400 million U.S. in potential sales to China this quarter.
In recent years, the U.S. government has applied increasing export restrictions to microchips
made with U.S. technology because of fears that Chinese companies could use them for military
purposes or to steal secrets.
In a written statement, the U.S. Commerce Department said: “We are taking a comprehensive
approach to implement additional actions necessary related to technologies, end-uses, and end-
users to protect U.S. national security...”
Shares of Nvidia are down 50% this year and trading at $150.94 U.S. a share. AMD’s stock is
down 44% year-to-date and trading at $84.87 U.S. per share.
