Global semiconductor stocks fell after new US export restrictions on AI chips, part of ongoing trade policies under President Donald Trump’s administration.

Nvidia warned of a US$5.5 billion revenue hit from China export curbs, while AMD estimated a US$800 million impact.

Nvidia’s shares dropped nearly 6%, and AMD’s fell 5.8%. Other AI chip companies like Arm, Broadcom, and Micron also declined by 2.5% to 4.6%.

The export curbs sparked a global selloff, hitting chip firms in Europe and Asia. Samsung and SK Hynix dropped 3% and 4%.

ASM International, Infineon Technologies, and Advantest also reported declines.

China remains a key market for US chipmakers. Nvidia said 13% of its revenue came from China last year, down from 21% two years ago.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The U.S.-China semiconductor struggle mirrors the 1980s U.S.-Japan chip war

Today’s restrictions on Nvidia and AMD’s China-bound AI chips echo the 1980s when the U.S. implemented protectionist measures against Japanese semiconductor manufacturers.

In 1986, under President Reagan, the U.S. forced Japan to limit semiconductor exports through trade agreements that established price floors, a move justified on national security grounds just as today’s China restrictions are1.

These historical trade barriers increased DRAM chip prices by 30-40% for American computer manufacturers, undermining their global competitiveness while attempting to protect domestic semiconductor companies2.

Despite these protections, by 1989 U.S. firms held only 35% of the global semiconductor market compared to Japan’s 51%, suggesting trade barriers alone weren’t effective2.

The most successful U.S. semiconductor companies ultimately prospered not through protection but through innovation, a lesson potentially relevant as today’s restrictions may unintentionally accelerate Chinese self-sufficiency in chip technology.

2️⃣ Export controls create ripple effects across the tech ecosystem

The restrictions on Nvidia’s H20 chips for China represent more than just $5.5 billion in lost revenue—they reflect broader economic consequences throughout the technology supply chain.